According to the neoclassical growth model, per capita income of a country cannot be raised by...
According to the neoclassical growth model, per capita income of a country cannot be raised by (other things equal):
a) increasing in the input of capital
b) increasing total factor productivity
c) increasing the number of workers
d) increasing saving rate
e) none of the above
Neoclassical Growth Model:
The neoclassical growth model identifies the steady economic growth in the country. It has a significant role in the level of production in the industries. The model is also known as the Solow-Swan model of growth.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your accountView this answer
The correct answer is e). none of the above
In the statement we've been given, according to the neoclassical growth model, there is no increase in...
See full answer below.
Become a member and unlock all Study Answers
Start today. Try it nowCreate an account
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
fromChapter 4 / Lesson 7
Learn the definition of neoclassical economics and see the neoclassical model. Study the neoclassical economic theory and compare it to classical economics.
Related to this Question
- Which of the following changes would lead, according to the Solow model, to a higher level of long-run output per worker? a. An increase in the saving rate. b. A lower level of capital per worker. c. A decrease in productivity. d. A rise in the rate of po
- Based on the figure, which of the following would cause the long-run equilibrium point to change from point B to point D? a) Firms and workers expected the price level to rise. b) The country's overall productivity increased. c) The economy was in an expa
- How does the rate of population growth influence the level of GDP per person? a. It increases the capital stock per worker which raises output per worker and it may increase technological progress whi
- An increase in labor productivity: a. increases the standard of living. b. decreases the standard of living. c. might be the result of an increase in the quantity of labor. d. generally occurs when physical capital decreases because firms must then hi
- According to Malthus's view, which of the following is a consequence of increased population? a. increased GDP per person. b. more people imply more ideas and more labour force, which promotes growth. c. depletion of productive resources and lower stan
- If more workers join the labor force of a country, the unemployment rate tends to _______. (a) increase (b) remain the same (c) None of the above.
- Explain what an increase in capital and/or technology does to wages, equilibrium full employment, productivity, and standard of living. Show this shift in a production function graph and labor supply graph drawn together one above the other.
- Which of the following definitely means productivity has increased? a. More output from more workers. b. Less output from fewer workers. c. Less output from more workers. d. More output from fewer workers.
- Which of the following factors contribute to economic growth? a. a decrease in the productivity of labor b. an increase in the proportion of the population that is college educated c. an increase in the average wage rate paid to workers d. an increase in
- What source of economic growth is reflected in the economy by an increase in productivity without an increase in productivity in land, labor, or capital?
- "If you produce more with the same land, labor, and capital, then your productivity went up?" Wouldn't SOMETHING have to change to increase productivity? Explain.
- According to Solow's model of economic growth, the growth rate of income per person is entirely determined by the growth rate of capital per worker when there is no technological progress. What determines the growth rate of capital per worker? In what sen
- If all workers are able to specialize and become more productive as more labor is hired, the amount of total output produced: a) increases at a decreasing rate. b) increases at a constant rate. c) increases at an increasing rate. d) decreases at an increa
- In the basic neoclassical growth model, where does equilibrium occur? a) Where investment per worker equals saving per worker. b) Where investment per worker equals depreciation per worker. c) Where investment per worker equals capital per worker. d) Wher
- Is the increase in the standard of living the result of workers making more money or that their money is worth more because supply is higher with the increased productivity?
- The number of workers employed will not change as a result of an increase in productivity when which of the following occurs? A. output growth exceeds productivity growth. B. the AS curve shifts dow
- Suppose that the introduction of computers increases the productivity of workers in the developed world. What would be expected of the wages? a) rise mainly in the developed countries b) rise mainly in the developing countries c) fall mainly in the develo
- Which of the following would cause an increase in a nation's long-run economic growth? a. An increase in the number of hours in the work week. b. An decrease in the labor force participation rate. c. A decrease in worker education. d. A decrease i
- Which of the following refers to diminishing marginal returns? A. The additional output produced in a firm decreased as more workers were hired. B. The total output of a firm decreased as more workers were hired. C. The profits of an entrepreneur increase
- Consider the Solow growth model with population growth rate n and rate of technological progress g. (a) Assuming that everyone in the population is working, what does the Solow growth model tell us about long-run growth rate of output per worker in the ec
- If labor productivity increases: a. the demand for labor increases. b. labor costs rise by equal increments. c. jobs will relocate. d. some workers will be laid off. e. none of the above
- Which of the following factors contribute to economic growth? Choose all that apply. a. An increase in the proportion of the population that is college-educated. b. A decrease in the productivity of labor. c. An increase in the standard of living. d. An i
- Which of the following will not cause the production possibilities frontier to shift outwards? a. an increase in the number of workers in the labor force b. an increase in the educational level of workers that increases their productivity c. shifting work
- If labor productivity growth slows down in a country, this means that the growth rate in ________ has declined. A labor force participation B the quantity of goods or services that can be produced by one hour of work C the working-age population D nom
- Increases in labor productivity (which drive a nation's standard of living) driven by the division of labor and specialization was articulated by: a. Karl Marx b. Robert Malthus c. John M. Keynes d. Adam Smith e. Joseph Schumpeter
- If worker A earns more in wages than worker B, it could be because: a. the product made by worker A sells for a higher price than that made by worker B. b. worker A uses more capital per worker than worker B. c. worker A has more natural ability than work
- A firm's productivity will decrease if: A. There is an increase in the firm's capital to labor ratio B. The firm hires more skilled workers C. The workers are given additional training D. None of the above
- Labor productivity and economic growth outlined the logic of how increased productivity is associated with increased wages. Detail a situation where this is not the case and explain why it is not.
- Which of the following would reduce the labor force participation rate, all else equal? A) an increase in the working-age population B) an increase in the unemployment rate C) a decrease in the unemployment rate D) an increase in the number of people in t
- A decrease in labor productivity and the real wage could be caused by: a) an increase in the demand for or supply of labor. b) an increase in the demand for labor or a decrease in the supply of labo
- If the productivity of its workers increases, the firm should: a. not change anything. b. lay off some of these workers. c. increase the wages of these workers. d. decrease the wages of these workers.
- Which of the following will cause an increase in the demand for labor? (Select all that apply.) a. an increase in the price of the output b. an increase in worker productivity c. an increase in wages d. an increase in the supply of workers
- Which of the following would not increase the supply of workers? a. improved job amenities and benefits b. additional workers in the labor force c. increased wages d. decrease in income from other sources e. All of the above would increase supply.
- Determine whether the following is a positive or normative statement: "Increased average labor productivity in a country should lead to faster growth."
- According to the shirking? model, an efficiency wage increases worker productivity because A. the wage is high enough above the market wage to eliminate shirking. B. it gives workers an incentive to r
- Which of the following does NOT lead to long-run economic growth? A. Increase in average wages. B. Technological change. C. Increase in the capital stock. D. Improved labor productivity.
- The aggregate supply curve becomes increasingly inelastic as the economy: a. has an increase in cyclically unemployed workers. b. has an increase in discouraged workers. c. has an increase in employed workers. d. none of the above
- Which of the following would cause a rightward shift in the labor demand curve? a. Manna from heaven. b. A rise in the wage rate. c. A rise in workers' marginal productivity. d. A decline in workers' nonlabor incomes.
- The rate of technological progress increases from 1 to 3%. Using the Solow growth model, explain what happens to output per worker in efficiency units and consumption per worker in efficiency units?
- Under the efficiency wage model, lower wage rates result in: A. a lower level of worker productivity. B. a higher level of worker productivity. C. no change in the level of worker productivity. D. an unpredictable effect on worker productivity.
- In the Solow model, suppose that the depreciation rate increases. Determine the effect of this on the quantity of capital per worker and on output per working the steady state. Explain the economic in
- In addition to generating more output, economic growth can also contribute to: A. improved health for workers. B. increased unemployment for workers. C. decreased productivity. D. a more equitable distribution of output.
- in the classical model, the increased willingness of women to enter the workforce had most likely lead to what outcome in the labor market? a)an increase in labor demand and higher real wages b)an i
- Labor productivity will increase if the quantity of __ increases and __. a. capital per hour worked; technology improves b. labor per unit of capital; immigration increases while capital is fixed c. capital per hour worked; immigration increases while cap
- Suppose an economy has an increase in labor input of 60 percent, while output has increased by 100 percent. Assuming no change in total factor productivity, calculate the percentage increase in the ca
- How is it possible for the output to increase without a proportional increase in the number of workers? What are the implications in our economy of more output being produced by less workers?
- The wages of those near retirement decrease slightly because these workers are A) gaining additional skills. B) becoming more productive. C) becoming more efficient. D) being discriminated against. E) gaining additional experience but are not keeping
- If wages rise with no increase in productivity or product demand, the firm will: a. hire more workers. b. lay off some workers. c. increase wages. d. expand production of the product.
- Use the per-worker production function to explain why additional capital per worker cannot be a source of long-run economic growth in an economy.
- Explain how output per capita can grow faster than labor productivity. Is it possible for labor productivity to grow faster than output per capita?
- For each of the following events, what is the effect on the SRAS and LRAS curves? a. The labor force grows. b. The amount of capital in the economy increases. c. Labour productivity rises. d. Energy prices rise.
- If labor productivity increases, a. the supply of labor will increase. b. the supply of labor will decrease. c. workers will earn wages higher than their marginal revenue product. d. the demand for labor will increase.
- Which of the following would increase the supply of labor? a. a decrease in the wages paid to workers b. an increase in the wage paid to workers c. additional workers in the work force d. all of the above e. B and C above only
- Labor productivity is output per unit of labor. An increase in labor productivity is a source of economic growth. (a) Identify two sources of increase in labor productivity. (b) Assume that a country s economy is at full employment. Productivity has bee
- Moving along a country's PPF, a reason opportunity costs increase is that: a. unemployment increases as a country produces more and more of one good. b. unemployment decreases as a country produces more and more of one good. c. some resources are better s
- Suppose the best-trained workers in a country migrate to other countries to pursue better opportunities. Does this tend to raise or lower labor productivity? Explain.
- Which of the following definitely means productivity has increased? (i) Less output from more workers. (ii) More output from fewer workers. (iii) More output from more workers. (iv) Less output from fewer workers.
- How would an increase in capital goods, holding the size of the labor force constant, help to make workers more productive and increase economic growth?
- If total factor productivity rises in the one-period model, explain what happens to the real wage in equilibrium, and why.
- Because of its effect on the amount of capital per worker, in the short term an increase in the working population is likely to: a) reduce productivity. Other things the same, this decrease will be l
- Output per worker is 50, the saving rate is 15 percent, the population is growing at one percent, depreciation is 9 percent, and the capital-labor ratio is 80. What happens to the capital labor ratio? Would it increase or decrease?
- Which one of the following is most likely to improve the wages of American workers? (a) An increase in business inventories (b) An increase in productivity (c) An increase in interest rates (d) All of the above.
- Does an increased level of aggregate compassion among a population lead to decline in productivity? Is there a social/economic theory linked to this?
- The supply curve for labor in a purely competitive market slopes upward because: a. the wage rate paid to workers falls as more are hired. b. the marginal product of labor falls as output increases. c. marginal resource cost rises as productivity increase
- Using the perfectly competitive labor demand and labor supply model, what would happen, all else being equal, to the real wage and the number of workers if there is an increase in the amount of physical capital as a result of positive net investment in th
- Suppose a shock hits an economy that abides by a classical model and you observe the following changes: overall output increases and marginal productivity of workers decreases. Which of the following could lead to these observations? a. a flood in Minneso
- Consider the Solow-Swan growth model with exogenous growth in labor productivity. How does the growth in labor productivity affect the steady-state outcomes for the growth rate of output, capital per worker, and output per worker? To what extent is growth
- If the labor force increases by 1.4 percent each year and productivity increases by 3.7 percent, how fast will output grow?
- Which of the following will shift the aggregate supply outward? a. lower wages b. higher prices c. higher energy prices d. increased labor productivity
- Is there a relationship between the growth of productivity and changes in wage rates? Can higher earnings be achieved without higher productivity? Discuss.
- Assume that a country experiences a reduction in productivity that shifts the labor demand curve downward and to the left. If the labor market were always in equilibrium, this would lead to: a) A lower real wage and a rise in unemployment, b) A lower real
- When society increases the level of capital per person, the result is called . It can apply both to additional human capital per worker and to additional physical capital per worker. a) Human capital b) Capital Deepening c) Specialization d) Employment
- With no change in labor productivity, what would happen to the real wage rate and potential GDP if the population increased?
- Is raising the capital-to-labor ratio a source of productivity growth? Explain.
- Improvements in the productivity of labor will tend to: a. decrease wages b. increase wages c. decrease the supply of labor d. increase the supply of labor
- Q=(L^0.2)x(K^0.5). If Firm A wanted to increase productivity by 40% and already knew they were going to increase capital by 20%, how much would they have to increase their labor force to reach this pr
- With no change in labor productivity, what would happen to the real wage rate and potential GDP if the population increase
- Which of the following factors will increase labor productivity in the United States? a. An increase in the average level of education. b. An increase in unskilled workers. c. An aging labor force. d. A decline in the number of women entering the workforc
- If labor productivity rises, then wages: (a) Will decrease and the number of jobs will decrease. (b) Will decrease, but the number of jobs will not change. (c) Can increase without a decrease in the number of jobs. (d) Can increase, but only if the number
- By paying efficiency wages, firms contribute to higher unemployment because they: a) Increase the wage bill, b) Make workers more productive, c) Keep the wage below the equilibrium level, d) Keep the wage above the equilibrium level.
- At what level of production does the marginal product of labor increase as the number of workers increases?
- In the Solow growth model, the steady-state growth rate of output per effective worker is _, and the steady-state growth rate of output per actual worker is _. a) zero; zero b) the sum of the rate of
- Which of the following are supply side factors of economic growth: a) lower worker productivity b) higher taxes c) increased input costs, such as gasoline d) more resources available
- Which of the following summarizes the impact of population growth on the labor market? A.) This will increase the labor supply, reduce the equilibrium wage, and increase the quantity of labor demande
- Two countries, A and B, are identical in every respect except that country A has a higher rate of population growth than country B. Thus, in steady state, country A has a lower level of output per worker but a higher growth rate of output per worker than
- As the quantity of labor increases while the amount of other inputs are held constant, marginal product of labor will: a. increase continuously. b. decrease continuously. c. initially decrease and then increase. d. initially increase and then decrease
- 1. Evaluate the following two statements. (1) The Ricardian model predicts wages across countries are correlated with labor productivity differences. (2) There is a correlation between wages and productivity at the national level in the data. A. Both a
- Workers in one country are more productive than workers in another country because: a) they have more complementary factors to work with. b) they have fewer complementary factors to work with. c) they are better motivated and paid.
- International labor migration does which of the following? a. leads to a convergence of real wage rates b. yields an increase in the world output c. hurts workers in the host country and capital owners in the source country d. all of the above
- Labor productivity increases when capital (blank) and labor (blank) a) decreases; increases b) increases; remains constant c) remains constant; decreases d) decreases; decreases
- What is capital deepening and explain why it tends to increase the real wage paid to labor and reduce the return earned by capital?
- All else equal, which of the following would not lead to economic growth: a) An increase in consumption, b) An increase in the number of workers, c) An increase in the skills of workers, d) An improvement in technology, e) An increase in the stock of mach