Chapter 12

Question 1

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

Answer 1

E) an increase in the saving rate

Question 2

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

Answer 2

D) growing at a rate of gA + gN.

Question 3

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.

Answer 3

B) growing at a rate of gA + gN.