In the Solow growth model without population growth and technological progress, which of the following statements is/are always true in the steady state when the saving rate increases? (i) Output per worker increases. (ii) Consumption per worker increases. (iii) Capital per worker increases. ○ a. (i), (ii), and (iii) are always true. b. O c. O d. None of the statements is always true. Only (i) and (ii) are always true. Only (i) and (iii) are always true.

In the Solow growth model without population growth and technological progress, which of the following statements is/are always true in the steady state when the saving rate increases? (i) Output per worker increases. (ii) Consumption per worker increases. (iii) Capital per worker increases. ○ a. (i), (ii), and (iii) are always true. b. O c. O d. None of the statements is always true. Only (i) and (ii) are always true. Only (i) and (iii) are always true.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In the Solow growth model, if all countries have the same technology, population growth,savings behavior, and depreciation rates, but that one is much richer than the others. What happens in the long run? A. The other countries catch up to the rich one. B. The rich country grows the fastest. C. The rich country becomes poorer than the others. D. Nothing.
Suppose Country A currently has more output and capital than Country B. However, Country A has no technological growth while Country B has persistent technological growth. Assume that the two countries are similar in all other variables. According to the Solow growth model with technological progress, we can expect that: O a. At some future point, Country B will have a higher income per capita. O b. In the steady state, Country B will reach the same income per capita as Country A. All the other statements are false. c. O d. Since they have different steady states, the growth of output per effective worker in both countries will have different rates.
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The Solow Growth Model assumes a closed economy. This implies a.savings equals investment b. a net capital outflow c. income equals household consumption d. tax revenue equals government expenditure
If climate change impacts (e.g., increased heat waves, droughts, wildfires, etc.) decrease the economy's technology level A, then, through the lens of the Solow growth model (and assuming the economy was originally in a steady-state), holding all else constant, we would expect it to: O A. Decrease steady-state capital, decrease steady-state output, uncertain impact on steady-state consumption O B. Increase steady-state capital, increase steady-state output, uncertain impact on steady-state consumption OC. No impact on steady-state capital, decrease steady-state output, decrease steady-state consumption O D. Decrease steady-state capital, decrease steady-state output, decrease steady-state consumption If households are worried about climate change and this concern increases their savings rate, then holding all else constant (including A, so focusing only on the change in savings rates), we would expect it to: O A. Increase steady-state capital, increase steady-state output, decrease…
which statement \s are true. use graphs to exlain a. In the Solow growth model, the saving rate is a crucial determinant of the economy's long-run growth rate of output per worker. b. In the endogenous growth model , the representative firm sets the wage so that the demand and supply of efficiency units of labour are equal. c. In the endogenous growth model , there is no steady state of the economy as human capital will always continue to grow forever. d. The assumption of Constant Returns to Scale technology implies that the marginal product of factor imput is always decreasing.
In the steady state in the Solow model, which is NOT one of the uses of new capital? a. To replace depreciating capital b. To replace capital exported to other countries c. To provide capital for wore out capital and new workers d. To provide capital for new workers
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An affluent country's income per capita is consistently growing at a pace higher than that of less developed countries. According to the Solow growth model, which of the following can likely explain this? (i) The affluent country is relatively closer to its steady state level. (ii) The affluent country has more rapid technological growth. (iii) The affluent country has a lower saving rate. 4 O a. Only (ii) O b. Only (iii) O c. Only (1) O d. (i), (ii), and (iii)