In the Solow growth model without population growth and technological progress, which of the following statements is/are always true in the steady state when the saving rate increases? (i) Output per worker increases. (ii) Consumption per worker increases. (iii) Capital per worker increases. ○ a. (i), (ii), and (iii) are always true. b. O c. O d. None of the statements is always true. Only (i) and (ii) are always true. Only (i) and (iii) are always true.
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- In the Solow growth model without population growth and technological progress, how can the steady state of an economy be described? (i) Total capital stock and total output are growing steadily over time. (ii) The change in capital stock per worker is zero. (iii) The level of investment per capita is equal to the depreciation of capital per person. O a. (i), (ii), and (iii) O b. Only (ii) and (iii) O c. Only (i) and (ii) O d. Only (i) and (iii)In the steady state of Solow's exogenous growth model, an increase in the savings rate .... O A. increases output per worker, reduces consumption per worker and decreases capital per worker. B. increases output per worker and increases capital per worker. C. decreases output per worker and decreases capital per worker. D. increases output per worker and decreases capital per worker. O E. decreases output per worker and increases capital per worker.Suppose that population growth increases. The Solow growth model with population growth and depreciation (but without technological progress) predicts that this will tend to deteriorate people's welfare because of: (i) lower total output (ii) lower output per worker (iii) lower consumption per worker O a. (i), (ii), and (iii) O b. Only (i) and (iii) O c. Only (ii) and (iii) O d. Only (i) and (ii)
- In the Solow growth model without population growth and technological progress, consumption per worker will be maximized in the steady state when: (1) Output per worker is maximized. (ii) Investment per worker is maximized. (iii) The marginal product of capital equals the depreciation rate. O a. (i), (ii), and (ii) O b. Only (iii) O c. Only (ii) Od. Only (1)3 pts in the Solow model, the economy reaches a steady-state because as capital per worker increases O savings per worker is constant, while the population growth rate is contare and the depreciation rate of capital decen, ing that the economy w gro endogenously while the population growth rate and the depreciation rate of capital are comitant implying that the economy will converge to a sady O marginal savings per worker diminishes, while the population growth rate and the depreciation rate of capital are constant implying that the economy will gro endogenously Osaving perv state. O marginal savings per worker diminishes, while the population growth rate and the depreciation rate of capital are constant, implying that the economy will converge to a steady-stateWhich impacts economic growth? O a decrease in the productivity of labor O an increase in the proportion of the population that is college educated O an increase in the average wage rate paid to workers O an increase in the standard of living
- Suppose the government decides to reduce the Department of Science and Technology's budget for research. Assume this cancelled investment in research could have paid off in terms of useful innovations that increase labor efficiency. Which of the following statements is true under the Solow growth model with population growth and technological progress? In the steady state, the growth rate of the country's output per capita is expected to decrease. O b. In the steady state, the growth rate of the country's output per capita is expected to increase. O c. All the other statements are false. d. In the steady state, the growth rate of the country's total output is expected to increase.To address the problems created by the pandemic, suppose the private sector has been permanently motivated to develop even more innovations regarding production. The Solow growth model then predicts that in the steady state. O a. output per effective worker and growth rate of output per worker will be lower. O b. output per effective worker will be lower, but growth rate of output per worker will be higher. All the other statements are false. O c. O d. both output per effective worker and the growth rate of total output will be higher.According to the Solow model, an increase to the savings rate will increase income per worker in the steady-state, but will have no effect on long-run growth rate of income per worker. O increase consumption per worker if and only if the new steady-state capital per worker is greater than the golden rule level of capital per worker. O increase the long-run growth rate of income per worker if and only if the new steady-state capital per worker is greater than the golden rule level of capital per worker. O increase income per worker in the steady-state and long-run growth rate of income per worker.
- Assume that a country's per-worker production is y = k1/2, where y is output per worker and kis capital per worker. Assume also that 10 percent of capital depreciates per year (= 0.10) 2 andthere is no population growth or technological change.a. If the saving rate (s) is 0.4, what are capital per worker, production per worker, andconsumption per worker in the steady state?b. Solve for steady-state capital per worker, production per worker, and consumption perworker with s = 0.6.c. Solve for steady-state capital per worker, production per worker, and consumption perworker with s = 0.8.d. Is it possible to save too much? Why?An affluent country's income per capita is consistently growing at a pace higher than that of less developed countries. According to the Solow growth model, which of the following can likely explain this? (i) The affluent country is relatively closer to its steady state level. (ii) The affluent country has more rapid technological growth. (iii) The affluent country has a lower saving rate. 4 O a. Only (ii) O b. Only (iii) O c. Only (1) O d. (i), (ii), and (iii)If the capital stock equals 200 units in year 1 and the depreciation rate is 5 percent per year, then in year 2, assuming no new or replacement investment, the capital stock would equal_____ units. Select one: a. 195 b. 210 c. 190 d. 200