2. Macroeconomics

Economic Growth — Quiz

Test your understanding of economic growth with 5 practice questions.

Practice Questions

Question 1

What condition defines the steady state in the Solow growth model with exogenous population growth n, technological progress g, and depreciation δ?

Question 2

In a Solow model with production function y = k^{1/2}, savings rate s=0.25, depreciation rate δ=0.05, population growth rate n=0.02, and technological progress g=0.01, what is the steady-state capital per effective worker, k*?

Question 3

Using growth accounting for a Cobb–Douglas production function Y = A K^{α} L^{1-α}, if α=0.4, the growth rates are g_Y=5\%, g_K=3\%, and g_L=1\%, what is the estimated total factor productivity growth, g_A?

Question 4

In the Solow growth model, the break-even investment per effective worker is given by (n+g+δ) k. What does the term (n+g+δ) represent?

Question 5

Why cannot capital accumulation alone sustain perpetual growth in output per worker in the Solow model?