Question 1

The convergence hypothesis of the Solow growth model states that all of the following will occur except that

Accepted Answer

The convergence hypothesis suggests that poorer economies will tend to grow at faster rates than richer ones, leading to a narrowing of income gaps and equal steady-state growth rates. Therefore, none of the statements A-D are exceptions to this hypothesis.

Question 2

One prediction of the Solow growth model is constant steady-state growth. Using extrapolation techniques for growth rates from prewar data for the United States, the United Kingdom, and Japan, which country best supports the Solow model's steady-state growth predictions? Which provides the least support?

Accepted Answer

The United States and Japan best support the Solow model's steady-state growth predictions because their growth rates have been relatively constant over time.

Question 3

One prediction of the Solow growth model is constant steady-state growth. Using extrapolation techniques for growth rates from prewar data for the United States, the United Kingdom, and Japan, which countryies) least supports) the Solow model's steady-state growth predictions?

Accepted Answer

Japan's postwar economic miracle, with its rapid growth rates far exceeding prewar levels, least supports the Solow model's prediction of constant steady-state growth. This is because the Solow model would not predict such a dramatic acceleration in growth from prewar levels, highlighting Japan as an outlier in this context.

Question 4

One way of testing the constant steady-state growth hypothesis of the Solow growth model is to compare growth rates before and after a "break date" and the corresponding postwar transition period. Which countryies) provides) the least support for this hypothesis?

Accepted Answer

The United Kingdom and Japan experienced significant structural changes in their economies after World War II, which led to a deviation from the constant steady-state growth path predicted by the Solow growth model.

Question 5

Which of the following statements about income divergence during the last two centuries is invalid?

Accepted Answer

The answer of Which of the following statements about income...

Question 6

Convergence in the Solow growth model requires that all countries have

Accepted Answer

Convergence in the Solow growth model requires that countries have the same production function and access to technology, ensuring they can potentially reach similar levels of income per worker over time if other conditions are equal.

Question 7

In the analysis of income distribution, of the following areas thought to play a role in understanding the wealth and poverty of nations, which does not belong?

Accepted Answer

Monetary policy does not directly affect the wealth and poverty of nations.

Question 8

^{In the regression equat}^ion^Y/N⁾^/^Y/N⁾⁼^a⁺^c^Y/N⁾1960^{, where}^Y/N⁾^/^Y/N⁾ stands for the average annual growth rate of per-capita income, the parameter c is___________when the data across countries are analyzed and __________ is found.

Accepted Answer

The parameter c is negative when convergence is found in the data across countries, indicating that countries with lower initial incomes grow faster than those with higher initial incomes, thus converging over time.

Question 9

The neoclassical growth revival argues that the gap between rich and poor nations

Accepted Answer

The neoclassical growth revival posits that once differences in saving rates and population growth rates are considered, the gap between rich and poor nations has narrowed, suggesting that these factors play a significant role in explaining economic growth disparities.

Question 10

Income inequality across the nations of the world during the last century has

Accepted Answer

Income inequality across nations has increased over the last century, with a significant gap between the wealthiest and poorest countries. This has been driven by various factors, including globalization, technological advancements, and policy decisions that have disproportionately benefited certain economies and sectors.

Question 11

One prediction of the Solow growth model is constant steady-state growth. Using extrapolation techniques for growth rates from prewar data for the United States, the United Kingdom, and Japan, which countryies) best supports) the Solow model's steady-state growth predictions?

Accepted Answer

The United States best supports the Solow model's steady-state growth predictions. Historically, the U.S. has shown a consistent long-term growth rate, aligning with the Solow model's prediction of a constant steady-state growth.

Question 12

For the production function Y/N = K/N)^0.⁷and a capital stock per worker ratio of $3,000,000 in country A, what is the approximate level of capital^{stock per worker ratio in country B if}^Y/N⁾A ⁼¹⁵^Y/B⁾B^?

Accepted Answer

The correct answer is D.The production function is Y/N = (K/N)^0.7. If Y/N)A = 15Y/B)B, then (K/N)A^0.7 = 15(K/N)B^0.7. Since K/N)A = $3,000,000, we can solve for K/N)B:(K/N)B = (K/N)A^0.7 / 15^0.7 = $3,000,000^0.7 / 15^0.7 = $63,000

Question 13

For the production function Y/N = K/N)^0.⁷and a capital stock per worker ratio of $3,000,000 in country A, what is the approximate difference in capital stock per worker ratios between countries A and B if, in country B,^Y/N⁾A ⁼¹⁵^Y/B⁾B^?

Accepted Answer

The production function is Y/N = (K/N)^0.7. Given that (Y/N)_A = 15(Y/N)_B, we can set up the equation (K/N)_A^0.7 = 15(K/N)_B^0.7. Solving for (K/N)_B, we find that (K/N)_B = (K/N)_A / 15^(1/0.7). With (K/N)_A = 3,000,000, the difference is approximately 50.

Question 14

Endogenous growth theory attempts to explain the continuing and increasing gaps between rich and poor nations by appealing to

Accepted Answer

Endogenous growth theory primarily focuses on endogenous technological change, suggesting that investment in human capital, innovation, and knowledge are significant contributors to economic growth. This theory argues that these factors are largely responsible for the differences in wealth and growth rates between countries, rather than external influences.

Question 15

One way of testing the constant steady-state growth hypothesis of the Solow growth model is to compare growth rates before and after a "break date" and the corresponding postwar transition period. Which countryies) provides) the most support for this hypothesis?

Accepted Answer

The answer of One way of testing the constant steady-state...

Question 16

In growth theory analysis, "convergence" occurs when

Accepted Answer

Convergence in growth theory refers to the process where poorer economies tend to grow at faster rates than richer ones, leading to a reduction in the income disparities between nations over time, hence moving towards equal per-capita income levels.

Question 17

One prediction of the Solow growth model is constant steady-state growth. Extrapolating growth rates from 1870 through 1929 using U.S. data generates predictions of per-capita GDP that are only away from actual performance.

Accepted Answer

The Solow growth model, when applied to historical U.S. data from 1870 through 1929, predicts per-capita GDP levels that are remarkably close to actual outcomes, with a deviation of only about 2.5 percent. This demonstrates the model's effectiveness in capturing the fundamental dynamics of economic growth over long periods, despite its simplifications.

Question 18

Suppose nations A and B begin with the same production functions and the same access to technology, but nation A has only a portion of the capital stock per worker that nation B has. Which of the following statements is false?

Accepted Answer

The answer of Suppose nations A and B begin with...

Question 19

The convergence hypothesis of the Solow growth model does not state that

Accepted Answer

The convergence hypothesis of the Solow growth model focuses on economic factors such as capital accumulation, technological progress, and labor growth as determinants of economic growth and convergence among countries. It does not directly attribute differences in growth rates to political misbehavior, which is more of a socio-political explanation rather than an economic one inherent to the model's assumptions.

Question 20

One way of testing the constant steady-state growth hypothesis of the Solow growth model is to compare growth rates before and after a "break date" and the corresponding postwar transition period. Which country provides the least support for this hypothesis? Which provides the most?

Accepted Answer

The answer of One way of testing the constant steady-state...

Quiz 6: Growth and the World Economy

The convergence hypothesis of the Solow growth model states that all of the following will occur except that

One prediction of the Solow growth model is constant steady-state growth. Using extrapolation techniques for growth rates from prewar data for the United States, the United Kingdom, and Japan, which countryies) least supports) the Solow model's steady-state growth predictions?

One way of testing the constant steady-state growth hypothesis of the Solow growth model is to compare growth rates before and after a "break date" and the corresponding postwar transition period. Which countryies) provides) the least support for this hypothesis?

Which of the following statements about income divergence during the last two centuries is invalid?

Convergence in the Solow growth model requires that all countries have

In the analysis of income distribution, of the following areas thought to play a role in understanding the wealth and poverty of nations, which does not belong?

^{In the regression equat}^ion^Y/N⁾^/^Y/N⁾⁼^a⁺^c^Y/N⁾1960^{, where}^Y/N⁾^/^Y/N⁾ stands for the average annual growth rate of per-capita income, the parameter c is_when the data across countries are analyzed and is found.

The neoclassical growth revival argues that the gap between rich and poor nations

Income inequality across the nations of the world during the last century has

One prediction of the Solow growth model is constant steady-state growth. Using extrapolation techniques for growth rates from prewar data for the United States, the United Kingdom, and Japan, which countryies) best supports) the Solow model's steady-state growth predictions?

For the production function Y/N = K/N) ^0.⁷and a capital stock per worker ratio of $3,000,000 in country A, what is the approximate level of capital^{stock per worker ratio in country B if}^Y/N⁾A ⁼¹⁵^Y/B⁾B^?

For the production function Y/N = K/N) ^0.⁷and a capital stock per worker ratio of $3,000,000 in country A, what is the approximate difference in capital stock per worker ratios between countries A and B if, in country B,^Y/N⁾A ⁼¹⁵^Y/B⁾B^?

Endogenous growth theory attempts to explain the continuing and increasing gaps between rich and poor nations by appealing to

One way of testing the constant steady-state growth hypothesis of the Solow growth model is to compare growth rates before and after a "break date" and the corresponding postwar transition period. Which countryies) provides) the most support for this hypothesis?

In growth theory analysis, "convergence" occurs when

One prediction of the Solow growth model is constant steady-state growth. Extrapolating growth rates from 1870 through 1929 using U.S. data generates predictions of per-capita GDP that are only away from actual performance.

Suppose nations A and B begin with the same production functions and the same access to technology, but nation A has only a portion of the capital stock per worker that nation B has. Which of the following statements is false?

The convergence hypothesis of the Solow growth model does not state that

One way of testing the constant steady-state growth hypothesis of the Solow growth model is to compare growth rates before and after a "break date" and the corresponding postwar transition period. Which country provides the least support for this hypothesis? Which provides the most?

Quiz 6: Growth and the World Economy

The convergence hypothesis of the Solow growth model states that all of the following will occur except that

One prediction of the Solow growth model is constant steady-state growth. Using extrapolation techniques for growth rates from prewar data for the United States, the United Kingdom, and Japan, which countryies) least supports) the Solow model's steady-state growth predictions?

One way of testing the constant steady-state growth hypothesis of the Solow growth model is to compare growth rates before and after a "break date" and the corresponding postwar transition period. Which countryies) provides) the least support for this hypothesis?

Which of the following statements about income divergence during the last two centuries is invalid?

Convergence in the Solow growth model requires that all countries have

In the analysis of income distribution, of the following areas thought to play a role in understanding the wealth and poverty of nations, which does not belong?

In the regression equation Y/N) /Y/N) = a + cY/N) 1960, where Y/N) /Y/N) stands for the average annual growth rate of per-capita income, the parameter c is___________when the data across countries are analyzed and __________ is found.

The neoclassical growth revival argues that the gap between rich and poor nations

Income inequality across the nations of the world during the last century has

One prediction of the Solow growth model is constant steady-state growth. Using extrapolation techniques for growth rates from prewar data for the United States, the United Kingdom, and Japan, which countryies) best supports) the Solow model's steady-state growth predictions?

For the production function Y/N = K/N) 0.7 and a capital stock per worker ratio of $3,000,000 in country A, what is the approximate level of capital stock per worker ratio in country B if Y/N) A = 15Y/B) B?

For the production function Y/N = K/N) 0.7 and a capital stock per worker ratio of $3,000,000 in country A, what is the approximate difference in capital stock per worker ratios between countries A and B if, in country B, Y/N) A = 15Y/B) B?

Endogenous growth theory attempts to explain the continuing and increasing gaps between rich and poor nations by appealing to

One way of testing the constant steady-state growth hypothesis of the Solow growth model is to compare growth rates before and after a "break date" and the corresponding postwar transition period. Which countryies) provides) the most support for this hypothesis?

In growth theory analysis, "convergence" occurs when

One prediction of the Solow growth model is constant steady-state growth. Extrapolating growth rates from 1870 through 1929 using U.S. data generates predictions of per-capita GDP that are only away from actual performance.

Suppose nations A and B begin with the same production functions and the same access to technology, but nation A has only a portion of the capital stock per worker that nation B has. Which of the following statements is false?

The convergence hypothesis of the Solow growth model does not state that

One way of testing the constant steady-state growth hypothesis of the Solow growth model is to compare growth rates before and after a "break date" and the corresponding postwar transition period. Which country provides the least support for this hypothesis? Which provides the most?

^{In the regression equat}^ion^Y/N⁾^/^Y/N⁾⁼^a⁺^c^Y/N⁾1960^{, where}^Y/N⁾^/^Y/N⁾ stands for the average annual growth rate of per-capita income, the parameter c is_when the data across countries are analyzed and is found.

For the production function Y/N = K/N) ^0.⁷and a capital stock per worker ratio of $3,000,000 in country A, what is the approximate level of capital^{stock per worker ratio in country B if}^Y/N⁾A ⁼¹⁵^Y/B⁾B^?

For the production function Y/N = K/N) ^0.⁷and a capital stock per worker ratio of $3,000,000 in country A, what is the approximate difference in capital stock per worker ratios between countries A and B if, in country B,^Y/N⁾A ⁼¹⁵^Y/B⁾B^?