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https://growthecon.com/StudyGuide/tests/test2.html
I have 20 question this is first 10 question
Refer to the “Test 2” section of the Study Guide, and use the Theoretical Paths figure. Prior to time period zero, a country is on a balanced growth path. Then, at time zero the country experiences a permanent increase in their population growth rate. Which of that paths in the figure shows how GDP per capita will evolve over time?
Path A (blue solid line)
B (Orange dashed line)
C (green dotted line)
D (red dashed line)
E (purple dashed line)
Refer to the “Test 2” section of the Study Guide, and use the Theoretical Paths figure. Prior to time period zero, a country is on a balanced growth path. Then, at time zero the country experiences a permanent increase in their gross capital formation share of GDP. Which of that paths in the figure shows how GDP per capita will evolve over time?
Refer to the “Test 2” section of the Study Guide, and use the Theoretical Paths figure. Prior to time period zero, a country is on a balanced growth path. Then, at time zero the country experiences a shock, one-time, decrease in the population (war), but all parameters stay the same. Which path describes how GDP per capita evolves over time?
Consider an economy that is on a balanced growth path. It experiences a one-time surprise increase in baseline productivity, , in 2025. The growth rate of productivity, , remains the same. Select *all* of the following that are true immediately following this surprise increase (i.e. in 2026).
The growth rate of the capital/output ratio is lower than normal in 2026 (and for several years afterwards as the economy approaches the new balanced growth path).
The growth rate of GDP per capita is higher than the normal productivity growth rate, , in 2026 (and for several years afterwards as the economy approaches the new balanced growth path).
Actual GDP per capita experiences a distinct increase (beyond normal growth) in from 2025 to 2026
The capital/output ratio falls from 2025 to 2026
Refer to the “Test 2” section of the Study Guide, and use the African economies figures. The growth experience of South Africa can be explained by what?
The level of log GDP per capita in South Africa did not shift after 1990, so there must have been no change in the years of schooling or gross capital formation share after 1990.
The increase in years of education around 1990 was offset by the decline in gross capital formation share around 1990, so the BGP of South Africa did not shift, and so their growth rate did not change significantly.
The decline in gross capital formation share around 1990 shifted the BGP lower for South Africa, explaining why GDP per capita fell from 1990 forward.
The increase in years of education around 1990 shifted the BGP higher for South Africa, explaining why growth was substantially higher than in Botswana or Ethiopia after 1990.
1 points
Refer to the “Test 2” section of the Study Guide, and use the African economies figures. The data on the gross capital formation share of GDP for Botswana are consistent with which answer?
The gross capital formation share in Botswana did not change significantly during the years shown in the figures, so it cannot explain the shift in BGP in Botswana.
The spike in gross capital formation share around 1970 can explain a period of rapid growth in GDP per capita in Botswana, but because the gross capital formation share fell back to around 0.3 after that, the spike around 1970 cannot by itself explain why Botswana reached the South African BGP by the 2000s.
The spike in gross capital formation share around 1970 can explain the entire path of GDP per capita for Botswana, and the fact that it reached the South African BGP by the 2000s. It only takes a temporary shift up in the gross capital formation share to shift the entire BGP in the Solow model.
The spike in gross capital formation in Botswana around 1970 must have been financed by international borrowing, given that Botswana was a poor country at that point. Because the debt payments were such a burden, that explains why Botswana’s balanced growth path failed to reach the level of South Africa.
Refer to the “Test 2” section of the Study Guide, and use the African economies figures. Which country had the highest growth rate from 1965-1990?
Ethiopia
South Africa
There is not enough information to tell
Botswana
You will need to access the “Test II” material on the Study Guide. Look at the Log GDP per capita figure in the “Theoretical Paths” section. For these five economies, order them by the growth rate of GDP per capita in periods 0 to 10. Put the fastest growing economy first, and the slowest growing economy last.
–1.2.3.4.5.
A (blue solid line)
B (orange dashed line)
Imagine an economy that is on a balanced growth path. It experiences a permanent increase in the years of experience. What is the growth rate of GDP per capita in *immediately* after this change?
Lower than
Higher than
There isn’t enough information to tell
Equal to
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