The Solow Model 3 – Taking the Model to Data - Practice Questions

1. Which of the following is NOT one of William Easterly’s “Victorian Values” to promote growth? *

increased child-bearing

increased savings

increased education

2. According to David Weil, between 1970 and 2005, countries with higher mean investment tended to have _____________ GDP per capita compared to countries with lower investment rates. *

higher

lower

the same

3. According to data presented by David Weil, additional years of schooling are _______________ correlated with higher levels of GDP per capita. *

negatively

positively

not at all

4. Consider a basic Solow Model represented by a Cobb-Douglas production function where Y=AK^α L^(1-α). The exponent α represents ___________________, while the exponent (1−α) represents _______________________. *

labor’s share of national income, capital’s share of national income

capital’s share of national income, labor’s share of national income

the components of the model which exhibit increasing returns to scale, the components of the model which exhibit decreasing returns to scale

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The Solow Model 3 – Taking the Model to Data - Practice Questions