Quiz on Technological Progress and Growth

What is required for sustained growth?

• Higher capital only

• Increased labor only

• Technological progress

• Decreased output

What does the state of technology (A) indicate?

• Output produced from capital and labor

• Number of workers needed

• Amount of capital only

• Rate of population growth

If the state of technology A doubles, what is the effect?

• It is as if the economy had twice as many workers

• Output decreases

• More capital is needed

• Less labor is required

What happens to output per effective worker with constant returns to scale?

• It changes by the same factor as capital and labor

• It decreases

• It remains constant

• It becomes negative

What does AN represent?

• Rate of technological progress

• Population growth

• Total capital

• Effective labor

What is the relationship between investment per effective worker and savings rate?

• Investment depends on the savings rate

• Investment is independent of savings

• Higher savings lead to lower investment

• Investment is only based on capital

What must happen to maintain a constant capital per effective worker?

• K must grow at a slower rate

• K must remain constant

• K must decrease

• K must grow at the rate of growth of AN

What is the effect of technological progress on output?

• Output decreases with improved technology

• Output increases with improved technology

• Output remains unchanged

• Output becomes unpredictable

What is a key factor for advanced countries to sustain growth?

• Higher taxes

• Imitation

• Innovation

• Decreased investment

What does R&D stand for?

• Resources and Distribution

• Research and Development

• Revenue and Debt

• Regulation and Design