ECON 100.1 4th LE Sample Exam

ECON 100.1 4TH LE SAMPLE EXAM 1. Which of the following does NOT describe Solow growth model? A. Shows how saving population growth and technological progress affect the level of an economy’s output and growth over time B. Explains why national income grows and why some economies grow faster than others C. It is a short run and open economy model d. All of the above e. None of the above 2. Which of the following causes capital stock k to change over time? A. Investment B. Depreciation C. Population D. Efficiency of labor E. All of the above 3. Which of the following is not a purpose of investment to maintain break even investment? A. Investment replaces depreciated capital B. Investment provides new workers with capital C. Investment provides capital for the new “effective workers” D. All of the above E. None of the above 4. Mortality rate is a measure of the number of deaths in a population. Which of the following does NOT cause mortality rates to drop? A. Better hygiene and medical science B. Introduction of sulfa drugs and antibiotics C. More advanced treatment for diseases D. Occurrences of wars and epidemics E. None of the above 5. Fertility rate is the ratio of live births in an area to the population of an area. Which of the following does NOT cause fertility rates to drop? A. Use of contraceptives B. Late marriages C. Higher income and education especially among women D. All of the above E. None of the above 6. According to the Solow growth model, very high saving rates are associated with _____. A. Lower steady-state per capita output B. Lower steady-state per capita capital C. Lower steady-state per capita consumption D. All of the above E. None of the above. 7. Using the Solow model with no population growth. In the Solow growth model, if investment exceeds depreciation, the capital per worker will _____ and output per worker will _____ until the steady state is attained. A. Increase; increase B. Increase; decrease C. Decrease; decrease E. Decrease; increase E. Zero; zero