Question

In the solow growth model, the steady-state growth rate of output per worker is ________

(a) equal to the sum of the rate of technological progress plus the rate of population growth

(b) greater than zero

(c) equal to zero

(d) less than zero

Answer #1

Option C.

- A Solow growth model is used to demonstrate the long run economic growth by showing how technology, population, labour and capital accumulates in long run.
- In the Solow growth model, the steady state growth rate of output per worker is constant or equal to zero.
- According to this model, when the population is increasing but the technology remains constant, and when the population and output are growing at an ''n" rate, then the output per worker is equal to zero.

In the Solow growth model of an economy with population growth
and technological progress, the steady-state growth rate in output
per worker is equal to:
(a) zero
(b) the rate of technological progress g.
(c) the growth rate of population n plus the rate of technological
progress g. (d) the rate of technological progress g minus the
growth rate of population n.
In the Solow growth model of an economy with population growth
and technological progress, the steady-state growth rate...

In the Solow growth model with population growth but no
technological progress, if in the steady state the marginal product
of capital equals 0.10, the depreciation rate equals 0.05, and the
rate of population growth equals 0.03, then the capital per worker
ratio ____ the Golden Rule level.
A) is above
B) is below
C) is equal to
D) will move to

1) In the steady state of the Solow model with technological
progress, which of the following variables is not
constant?
(a) capital per effective worker
(b) the real rental price of capital
(c) the real wage
(d) the capital-output ratio
2) The U.S. economy has more/less capital than at
the Golden Rule steady state, suggesting that it may be desirable
to
increase/decrease the rate of saving.
3) The purpose of exogenous/endogenous
growth theory is to explain technological progress. Some of these...

In the Solow model, increases in the rate of population growth
and increases in the rate of technological progress both lower the
steady state values of capital and output per efficiency unit. True
or false: Therefore both are undesirable. If false, explain how
they differ in their consequences for levels and growth rates of
Y/L.

In the steady state of the Solow model, higher population growth
leads to a _________ level of income per worker
and _________ growth in total income.

Use the Solow-Swan model to explain what would happen to steady
state capital per
effective worker resulting from:
a. A decrease in the population growth rate.
b. An increase in labor productivity.
c. An increase in the investment share of GDP.

1. For the following, assuming that there is no population
growth or technological progress.
a) What is the equation that defines the steady-state level of
capital per worker?
b) How would you determine the steady state level or output per
worker (i.e., real GDP per capita) from (a).
c) Explain, in words, how an economy that starts with too much
capita per worker gets to its steady state.
2. Many demographers predict that the United States will have
zero annual...

Assume that an economy is described by the Solow growth model as
below:
Production Function: y=50K^0.4 (LE)^0.6
Depreciation rate: S
Population growth rate: n
Technological growth rate:g
Savings rate: s
a. What is the per effective worker production function?
b. Show that the per effective worker production function
derived in part a above exhibits diminishing marginal returns in
capital per effective worker
C.Solve for the steady state output per effective worker as a
function of s,n,g, and S
d. A...

Answer the following questions using the basic Solow growth
model, without population growth or technological progress.
(a) Draw a diagram with per worker output, y, consumption, c,
saving, s and investment, i, on the vertical axis and capital per
worker, k, on the horizontal condition. On this diagram, clearly
indicate steady-state values for c, i, and y. Briefly outline the
condition that holds in the steady- state (i.e. what is the
relationship between investment and the depreciation of
capital?).
(b)...

Suppose an economy described by the Solow model is in a steady
state with population growth n of 1.8 percent per year and
techno- logical progress g of 1.8 percent per year.Total
output and total capital grow at 3.6 percent per year. Suppose
further that the capital share of output is 1/3. If you used the
growth- accounting equation to divide output growth into three
sources—capital, labor, and total factor productivity—how much
would you attribute to each source?

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