Question 1

According to the Solow growth model, which of the following is necessary for sustained increases in standards of living over time?

Accepted Answer

Technological progress

Question 2

In the Solow model, what happens to output per worker and capital per worker in the long run if there is no technological progress?

Accepted Answer

They converge to a constant level

Question 3

Which of the following best describes the 'Golden Rule' level of capital in the Solow model?

Accepted Answer

The level of capital per worker that maximizes steady-state consumption per worker

Question 4

Suppose a country increases its savings rate $s$. According to the Solow model, what is the long-run effect on the growth rate of output per worker?

Accepted Answer

It remains unchanged

Question 5

In growth accounting, the Solow residual is used to measure:

Accepted Answer

Growth in total factor productivity (TFP)

Question 6

Which of the following equations represents the per-worker production function in the Solow model?

Accepted Answer

$y = f(k)$

Question 7

Consider the Cobb-Douglas production function $F(K, N) = K^{\alpha}N^{1-\alpha}$. If the labor share in national income is 70%, what is the value of $\alpha$?

Accepted Answer

$\alpha = 0.3$

Question 8

In the Solow model, what is the fundamental equation for capital accumulation?

Accepted Answer

$K' = (1-d)K + I$

Question 9

Which of the following is a plausible reason why official GDP data in China may be exaggerated, according to the lecture?

Accepted Answer

Local governments encourage firms to overreport value-added

Question 10

If the steady-state capital per worker $k^*$ is below the current capital per worker $k_0$, what does the Solow model predict will happen over time?

Accepted Answer

Capital per worker will decrease

Question 11

Which of the following is NOT one of the three widely held views (myths) about the drivers of China's growth since 1978?

Accepted Answer

Growth driven by consistent underreporting of GDP data

Question 12

In the Solow model, what is the effect of a sustained increase in total factor productivity $z$?

Accepted Answer

It causes a sustained increase in output per worker

Question 13

Which of the following best describes the concept of 'capital deepening'?

Accepted Answer

An increase in capital per worker

Question 14

Suppose a country with a very low capital stock experiences rapid growth after a war. According to the Solow model, what is the most likely explanation?

Accepted Answer

Rapid growth is due to convergence toward the steady-state

Question 15

In the Solow model, the steady-state level of capital per worker $k^*$ is determined by which condition?

Accepted Answer

$sf(k^*) = (n + d)k^*$

Question 16

Which of the following is a key lesson from the Solow model regarding long-run growth in living standards?

Accepted Answer

Sustained increases in living standards require technological innovation

Question 17

If a country saves nothing ($s=0$) or everything ($s=1$), what is the steady-state consumption per worker according to the Solow model?

Accepted Answer

It is zero

Question 18

Which of the following is a real-world example supporting the Solow model's prediction about post-war growth?

Accepted Answer

Rapid growth in Japan, Germany, and the former Soviet Union after World War II

Question 19

In the context of growth accounting, which of the following is NOT a factor that contributes to aggregate output growth?

Accepted Answer

Growth in government spending

Macroeconomic Growth and the Solow Model: China's Growth Experience

Study Guide - Practice Questions

Study Guide - Flashcards