Deck 12: Technological Progress and Growth

Question 1

Which of the following will cause an increase in the steady-state growth rate of capital?

A)an increase in the saving rate
B)an increase in the population growth rate
C)a temporary increase in technological progress
D)all of the above
E) none of the above

Answer 1

an increase in the population growth rate

Question 2

Which of the following will cause a reduction in the steady-state growth rate of output per worker?

A)a reduction in the saving rate
B)an increase in the population growth rate
C)an increase in the rate of depreciation
D)an increase in the saving rate
E) none of the above

Answer 2

none of the above

Question 3

Use the following information to answer the question(s) below:
(1) the rate of depreciation is 10% per year,
(2) the population growth rate is 2% per year, and
(3) the growth rate of technology is 3% per year.
Refer to the information above.Which of the following represents the level of investment needed to maintain constant capital per effective worker (K / NA)in this economy?

A)0.02K
B)0.03K
C)0.05K
D)0.10K
E) 0.15K

Answer 3

0.15K

Question 4

Assume that an economy experiences both positive population growth and technological progress.In this economy,which of the following is constant when balanced growth is achieved?

A)I
B)S
C)Y / N
D)all of the above
E) none of the above

Question 5

Suppose there is an increase in the saving rate.This increase in the saving rate will cause an increase in which of the following once the economy reaches its new steady state equilibrium?

A)growth rate of output
B)growth rate of capital
C)growth rate of capital per worker
D)all of the above
E) none of the above

Question 6

Use the following information to answer the question(s) below:
(1) the rate of depreciation is 10% per year,
(2) the population growth rate is 2% per year, and
(3) the growth rate of technology is 3% per year.
Refer to the information above.Which of the following represents the level of investment needed to maintain a constant capital stock (K)in this economy?

A)0.02K
B)0.03K
C)0.05K
D)0.10K
E) 0.15K

Question 7

Use the following information to answer the question(s) below:
(1) the rate of depreciation is 10% per year,
(2) the population growth rate is 2% per year, and
(3) the growth rate of technology is 3% per year.
Refer to the information above.Which of the following represents the steady-state growth rate of output per worker in this economy?

A)2%
B)3%
C)5%
D)10%
E) 15%

Question 8

Which of the following will cause an increase in output per effective worker?

A)an increase in population growth
B)an increase in the rate of depreciation
C)a reduction in the saving rate
D)an increase in the rate of technological progress
E) an increase in the saving rate

Question 9

Assume that an economy experiences both positive population growth and technological progress.Once the economy has achieved balanced growth,we know that the capital stock is

A)constant.
B)growing at a rate of gA.
C)growing at a rate of gN.
D)growing at a rate of gA + gN.
E) none of the above

Question 10

In the following production function,Y = f(K,NA),a 20% increase in A will cause which of the following variables to increase by 20%?

A)labor
B)effective labor
C)output
D)output per worker
E) none of the above

Question 11

In the production function Y = f(K,NA),for a given state of technology,constant returns to scale implies that output (Y)will increase by 7% when

A)K or NA increase by 7%.
B)K and N increase by 7%.
C)N or A increase by 7%.
D)N and A increase by 7%.
E) all of the above

Question 12

Which of the following is always true after an economy reaches a balanced growth equilibrium?

A)the growth rate of output equals the rate of depreciation
B)population growth is zero
C)the growth rate of capital is equal to the growth rate of the effective work force
D)the growth rate of capital is equal to the savings rate
E) none of the above

Question 13

Suppose output per worker in a country has grown at the same rate as technology over for many years.This country's growth would be described as

A)"appropriable" growth.
B)"balanced" growth.
C)"effective" growth.
D)"diffuse" growth.
E) none of the above

Question 14

In the following production function,Y = f(K,NA),suppose A increases by 20%.This 20% increase in A implies that

A)the same output can be produced with 20% less labor.
B)the effective quantity of labor has increased by 20%.
C)output will increase by less than 20%.
D)all of the above
E) both A and C.

Question 15

Use the following information to answer the question(s) below:
(1) the rate of depreciation is 10% per year,
(2) the population growth rate is 2% per year, and
(3) the growth rate of technology is 3% per year.
Refer to the information above.Which of the following equals the annual growth rate of "effective labor" in the steady state in this economy?

A)2%
B)3%
C)5%
D)10%
E) 15%

Question 16

Use the following information to answer the question(s) below:
(1) the rate of depreciation is 10% per year,
(2) the population growth rate is 2% per year, and
(3) the growth rate of technology is 3% per year.
Refer to the information above.Which of the following represents the steady-state growth rate of output in this economy?

A)2%
B)3%
C)5%
D)10%
E) 15%

Question 17

Assume that an economy experiences both positive population growth and technological progress.In this economy,which of the following is constant when balanced growth is achieved?

A)K
B)NA
C)K / N
D)Y / NA
E) none of the above

Question 18

Assume that an economy experiences both positive population growth and technological progress.Once the economy has achieved balanced growth,we know that output (Y)is

A)constant.
B)growing at a rate of gA + gN.
C)growing at a rate of gN.
D)growing at a rate of gA.
E) growing at a rate of gA - gN.

Question 19

Which of the following represents a dimension of technological progress?

A)larger quantities of output for given quantities of capital and labor
B)better products
C)a larger variety of products
D)new products
E) all of the above

Question 20

Which of the following is not constant when balanced growth is obtained?

A)Y / NA
B)NA
C)K / NA
D)all of the above
E) none of the above

Question 21

Let α represent labor's share of total output.The Solow residual is represented by

A)gᵧ - [αgN + (1 - α)gK].
B)gᵧ.
C)gK.
D)αgN.
E) 1 / (1 - α).

Question 22

Use the information provided below to answer the following question(s).
δ = .11
gA = .03
gN = .02
Refer to the information above.Given this information,we know that effective labor (NA)grows at which rate?

A)0
B)1%
C)4%
D)5%
E) 15%

Question 23

Assume that an economy experiences both positive population growth and technological progress.Once the economy has achieved balanced growth,we know that growth rate of K / NA is

A)gA gN.
B)gA + gN.
C)0)
D)gA.
E) none of the above

Question 24

Use the information provided below to answer the following question(s).
δ = .11
gA = .03
gN = .02
Refer to the information above.Given this information,the steady state rate of growth of output per worker is

A)0)
B)2%.
C)3%.
D)5%.
E) 16%.

Question 25

Explain what factors determine how much investment is required to maintain a given level of capital per effective worker.

Question 26

Assume that an economy experiences both positive population growth and technological progress.A reduction in the saving rate will cause

A)no change in K / NA.
B)a permanent reduction in the rate of growth of output per worker.
C)a permanent reduction in the rate of growth of output.
D)no change in Y / NA.
E) none of the above

Question 27

Assume that an economy experiences both positive population growth and technological progress.Once the economy has achieved balanced growth,we know that

A)S / NA = (δ + gA + gN)K / NA.
B)S / NA = (gA + gN)K / NA.
C)I / NA = (δ)K / NA.
D)I = δK.
E) none of the above

Question 28

Use the information provided below to answer the following question(s).
δ = .11
gA = .03
gN = .02
Refer to the information above.Which of the following represents the amount of investment per effective worker needed to maintain a constant level of capital per effective worker (K / NA)?

A)0.02(K / NA)
B)0.03(K / NA)
C)0.05(K / NA)
D)0.13(K / NA)
E) 0.16(K / NA)

Question 29

Use the information provided below to answer the following question(s).
δ = .11
gA = .03
gN = .02
Refer to the information above.Given this information,the steady state rate of growth of output is

A)0)
B)2%.
C)3%.
D)5%.
E) 16%.

Question 30

Assume that an economy experiences both positive population growth and technological progress.Once the economy has achieved balanced growth,we know that the capital per worker ratio (K / N)is

A)constant.
B)growing at a rate of gA - gN.
C)growing at a rate of gN.
D)growing at a rate of gA.
E) growing at the same rate as Y / N.

Question 31

Assume that an economy experiences both positive population growth and technological progress.Once the economy has achieved balanced growth,we know that the output per effective worker ratio (Y / NA)is

A)growing at a rate of 0.
B)growing at a rate of gA + gN.
C)growing at a rate of gN.
D)growing at a rate of gA.
E) none of the above

Question 32

Suppose there is a reduction in the saving rate.This decrease in the saving rate will cause a reduction in which of the following once the economy reaches its new steady state equilibrium?

A)growth rate of output
B)growth rate of capital
C)growth rate of capital per worker
D)all of the above
E) none of the above

Question 33

Assume the economy has achieved the balanced growth steady state.Explain what factors determine the rates of growth of each of the following variables when balanced growth is achieved: output per effective worker,capital per effective worker,output per worker,output,and consumption per worker.

Question 34

Explain the different dimensions of technological progress.

Question 35

Let α represent labor's share of total output.The Solow residual is,therefore,represented by

A)αgᵧ.
B)αgA.
C)αgK.
D)αgN.
E) 1 / α.

Question 36

Assume that an economy experiences both positive population growth and technological progress.Once the economy has achieved balanced growth,we know that the output per worker ratio (K / N)is

A)constant.
B)growing at a rate of gA - gN.
C)growing at a rate of gN.
D)growing at a rate of gA.
E) growing at a rate of δ + gA + gN.

Question 37

Which of the following will cause an increase in the steady-state growth rate of output per worker?

A)an increase in the saving rate
B)a reduction in the population growth rate
C)a reduction in the rate of depreciation
D)a reduction in the saving rate
E) none of the above

Question 38

Assume that an economy experiences both positive population growth and technological progress.Once the economy has achieved balanced growth,we know that the capital per effective worker ratio (K / NA)is

A)growing at a rate of δ + gA + gN.
B)growing at a rate of gA + gN.
C)growing at a rate of gN.
D)growing at a rate of gA.
E) none of the above

Question 39

Use the information provided below to answer the following question(s).
δ = .11
gA = .03
gN = .02
Refer to the information above.Given this information,the steady state rate of growth of Y / NA is

A)0)
B)2%.
C)3%.
D)5%.
E) 16%.

Question 40

Explain what factors determine the slope of the required investment line.

Question 41

Which of the following best describes a situation where research is considered appropriable?

A)research that is well suited to its commercial purpose
B)research that is easily copied by another firm
C)research that translates into many new products
D)all of the above
E) none of the above

Question 42

Graphically illustrate and explain the effects of an increase in the saving rate on the Solow growth model.In your answer,you must clearly label all curves and the initial and final equilibria.In your answer,explain what happens to the rate of growth of output per worker and the rate of growth of output as the economy adjusts to this increase in the saving rate.

Question 43

Patent protection is important in affecting technological progress because it makes research and development

A)diffuse more quickly.
B)more fertile.
C)more easily available.
D)more appropriable.
E) none of the above

Question 44

Graphically illustrate and explain the effects of an increase in the rate of technological progress on the Solow growth model.In your answer,you must clearly label all curves and the initial and final equilibria.In your answer,explain what happens to the rate of growth of output per worker and the rate of growth of output as the economy adjusts to this increase in the rate of technological progress.

Question 45

Based on recent research,which of the following is the most likely cause of the reduction in the rate of technological progress?

A)measurement error
B)the increase in the size of the service sector
C)a reduction in R&D spending
D)a reduction in the fertility of research
E) all of the above

Question 46

In 1965,Gordon Moore predicted that the number of transistors in a chip would double approximately every

A)6-12 months.
B)18-24 months.
C)five years.
D)10 years.
E) none of the above

Question 47

Moore's law refers to which of the following?

A)The steady state rate of growth of output per capita will equal the rate of growth of technological progress.
B)The number of transistors in a chip would double approximately every 18-24 months.
C)The steady state rate of growth of output per effective worker will be zero.
D)The saving rate that maximizes steady state consumption is .5 (s = 0.5).
E) none of the above

Question 48

Patents represent

A)the protection given to new products by the law.
B)how R&D spending translates into new ideas.
C)the extent to which firms benefit from the results of their own R&D spending.
D)the rate of technological progress.

Question 49

Graphically illustrate and explain the effects of an increase in population growth on the Solow growth model.In your answer,you must clearly label all curves and the initial and final equilibria.In your answer,explain what happens to the rate of growth of output per worker and the rate of growth of output as the economy adjusts to this increase in population growth.

Question 50

Suppose policy makers pass a budget that results in an increase in the budget deficit.Also assume that this fiscal policy action results in a reduction in the saving rate.To what extent will this reduction in the saving rate cause permanent changes in the rate of growth of output per worker? Explain.

Question 51

To what extent can changes in the rate of technological progress cause permanent changes in the rate of growth of output per worker? Explain.

Question 52

Suppose there is an increase in the saving rate.Explain what effect this increase in the saving rate will have on the rate of growth of output per worker.

Question 53

Which of the following represents the appropriability of research?

A)the protection given to new products by the law
B)how R&D spending translates into new ideas
C)the extent to which firms benefit from the results of their own R&D spending
D)the rate of technological progress
E) both B and C

Question 54

Which of the following is hypothesized to explain the reduction in the rate of technological progress?

A)measurement error
B)the increase in the size of the service sector
C)a reduction in R&D spending
D)all of the above
E) none of the above

Question 55

The evidence shows that,over the last 25 years,spending on research and development in the rich countries has

A)decreased dramatically.
B)decreased slightly.
C)remained constant.
D)increased in absolute numbers, but decreased as a percentage of GDP.
E) increased as a percentage of GDP.

Question 56

Which of the following best describes a situation where research is considered relatively fertile?

A)research that translates into many new products
B)research that costs the firms relatively little money
C)research that cannot be easily copied by other firms
D)all of the above
E) none of the above

Question 57

Convergence of output per capita across countries has come from

A)a convergence of saving rates.
B)a convergence of the accumulation of capital.
C)higher technological progress from the countries that started behind.
D)all of the above

Question 58

The method of constructing a measure of technological progress relies on which of the following assumptions?

A)each factor of production is paid its marginal product
B)population growth does not change
C)population growth is zero
D)the saving rate does note change

Question 59

Which of the following can help explain the technology gap that exists between some countries?

A)poorly established property rights
B)political instability
C)the relative absence of entrepreneurs
D)all of the above
E) none of the above

Question 60

Which of the following represents the fertility of research?

A)the protection given to new products by the law
B)how R&D spending translates into new ideas
C)the extent to which firms benefit from the results of their own R&D spending
D)the rate of technological progress
E) both B and C

Question 61

Technological progress has played a very important role in China's economic growth.Where does the technological progress in China come from?

Question 62

What factors determine technological progress?

Question 63

Research suggests that the relatively higher rate of growth of output per capita between in China between 1996 and 2011 was the result of which of the following?

A)an increase in the rate of technological progress
B)an increase in K / NA
C)an increase in the rate of growth of N
D)an increase in the saving rate
E) both A and D

Question 64

High growth in the rich countries from 1985 to 2014 was most likely due to

A)a high savings rate.
B)high capital accumulation.
C)technological progress.
D)high consumption rates.
E) monetary policy.

Question 65

The rate of growth of output per capita for the United States and France between 1985 and 2014 has been caused by

A)the rate of technological progress.
B)the saving rate.
C)the accumulation of capital.
D)the rate of growth of N.

Question 66

From 1996 to 2011,the rate of growth of output per worker in China has been approximately equal to

A)5%.
B)10%.
C)15%.
D)18%.
E) 23%.

Question 67

The rate of growth of output per worker in the United States between 1985 and 2014 was approximately equal to which of the following?

A)1)7%
B)3)8%
C)4)8%
D)5)8%

Question 68

Suppose policy makers pass a budget that results in a reduction in the budget deficit.Also assume that this fiscal policy action results in an increase in the saving rate.To what extent will this increase in the saving rate cause permanent changes in the rate of growth of output per worker? Explain.

Question 69

Explain what is meant by the fertility and appropriability of the research process.

Question 70

Which country had the highest rate of technological progress from 1985 to 2013?

A)Japan
B)France
C)United States
D)United Kingdom

Question 71

Suppose there is a decrease in the saving rate.Explain what effect this decrease in the saving rate will have on the rate of growth of output per worker.

Question 72

From 1978 to 1995,the rate of growth of output per worker in China appears to be

A)the result of capital accumulation.
B)the result of technological progress.
C)the result of trade barriers.
D)equal to that of the United States.
E) none of the above

Question 73

Graphically illustrate and explain the effects of a reduction in the saving rate on the Solow growth model.In your answer,you must clearly label all curves and the initial and final equilibria.In your answer,explain what happens to the rate of growth of output per worker and the rate of growth of output as the economy adjusts to this decrease in the saving rate.

Question 74

Which of the following countries had the highest rate of growth of output per worker between 1985 and 2014?

A)France
B)Japan
C)United States
D)United Kingdom

Question 75

Discuss several of the hypotheses concerning the reduction in productivity growth in the mid-1970s.