4) As an economy adjusts to an increase in the saving rate, we would expect output per worker
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5) Suppose the saving rate is initially less than the golden rule saving rate. We know withcertainty that a reduction in the saving rate will causeA) a reduction in the capital labor ratio.B) a reduction in output per worker.C) a reduction in consumption per worker.D) all of theseE) none of these
Chapter 121) In the following production function, Y = f(K, NA), a 20% increase in A will cause which ofthe following variables to increase by 20%?
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2) Which of the following will cause an increase in output pereffectiveworker?
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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.3) Refer to the information above. Which of the following equals the annual growth rate of"effective labor" in the steady state in this economy?
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An increase in the saving rate will affect which of the following variables in the long run?
A) output per worker
B) capital per worker
C) the level of investment
D) all of the above
A reduction in the saving rate will not affect which of the
following variables in the long run?
A) output per worker
B) the growth rate of output per worker
C) the amount of capital in the economy
D) capital per worker
B) the growth rate of output per worker
Which of the following statements is always true?
A) Investment equals
depreciation.
B) Investment equals the capital stock minus depreciation.
C) The capital stock is equal to investment minus depreciation.
D) Any change in the capital stock is equal to investment minus depreciation.
E) The increase in investment is equal to the capital stock minus depreciation.
D) Any change in the capital stock is equal to investment minus depreciation.
In the absence of technological progress, which of the following remains constant in the steady state equilibrium?
A) investment per worker
B) output per worker
C) saving per worker
D) all of the above
When an economy is operating at the steady state, we know that
A) steady state saving equals consumption.
B)
steady state saving is less than total consumption.
C) steady state saving is equal to depreciation per worker.
D) steady state saving exceeds depreciation each year by a constant amount.
C) steady state saving is equal to depreciation per worker.
In the absence of technological
progress, which of the following is true when the economy is operating at the steady state?
A) The growth of output per worker is zero.
B) The growth of output per worker is equal to the saving rate.
C) The growth of output per worker is equal to the rate of investment.
D) The growth of output per worker is equal to the rate of depreciation.
A) The growth of output per worker is zero.
When steady state capital per worker is above the golden-rule level, we know with certainty that an increase in the saving rate will
A) increase consumption in both the short run and the long run.
B) decrease consumption in both the short run and the long run.
C) decrease consumption in the short run, and increase it in the long run.
D) increase consumption in the short run, and
decrease it in the long run.
B) decrease consumption in both the short run and the long run.
Suppose two countries are identical in every way with the following exception. Economy A has a higher rate of depreciation (δ) than economy B. Given this information, we know with certainty that
A)
steady state consumption in A is higher than in B.
B) steady state consumption in A is lower than in B.
C) steady state consumption in A and in B are equal.
D) steady state growth of output per worker is higher in A than in B.
B) steady state consumption in A is lower than in B.
Which
of the following represents the change in the capital stock?
A) consumption minus depreciation
B) output minus depreciation
C) investment minus saving
D) investment minus depreciation
D) investment minus depreciation
When the economy is in the steady state, we know with certainty
that
A) investment per worker is equal to depreciation per worker.
B) consumption per worker is maximized.
C) output per worker is maximized.
D) the growth rate is maximized.
A) investment per worker is equal to depreciation per worker.
Suppose the economy is initially in the steady state.
An increase in the depreciation rate (δ) will cause
A) a reduction in K/N.
B) a reduction in Y/N.
C) a reduction in C/N.
D) all of the above
Suppose the following situation exists for an economy: Kt+1/N < Kt/N. Given this information, we know that
A) saving per worker equals depreciation per worker in period t.
B) saving per worker is less than depreciation per worker in period t.
C) saving per
worker is greater than depreciation per worker in period t.
D) the saving rate fell in period t.
B) saving per worker is less than depreciation per worker in period t.
If the saving rate is 1 (i.e., s = 1), we know that
A) K/N will be at its highest level.
B) Y/N will be at its highest
level.
C) C/N = 0.
D) all of the above