Solve the following multiple choice questions

1). Hong Kong and Singapore achieved high economic growth between 1966 and 1990. Which of the following characteristics did these two countries NOT have in common? 

a. a fairly stable government

 

b. a very low degree of government intervention

 

c. industries were encouraged to export and compete in world markets

 

d. increases in labor force participation rates

 

e. great investments in human capital

 

 

2). Assume an endogenous growth model with labour augmenting technology. The production function is Y = F(K,AN), with A = 2(K/N) such that y = 2k. If the savings rate is s = 0.08, the rate of population growth is n = 0.03, and the rate of depreciation is d = 0.04, what is the growth rate of output per capita?

 

a. 1%

b. 3%

 c. 4%

d. 7%

e. 9%

 

3). Assume an endogenous growth model with labour augmenting technology and a production function of the form Y = F(K,AN), where A = 1.2(K/N) such that y = (1.2)k. If the savings rate is s = 0.15 and the rate of depreciation is d = 0.05, how high does population growth (n) have to be to achieve a growth rate of 10 percent?

 

a. 15%

b. 12%

c. 10%

d. 5%

e. 3%

 

4). Which of the following economists did NOT significantly contribute to the debate on exogenous versus endogenous growth?

 

a. Robert Barro

b. Gregory Mankiw

c. Robert Lucas

d. David Ricardo

e. Paul Romer

 

5). Assume a production function with only two inputs, capital and labour. In this case, the concept of a diminishing marginal product of capital implies that

 

a. as less capital is being used, more and more labour has to be employed to increase output

b. as both labour and capital inputs are increased, output increases but at a decreasing rate

c. as the amount of capital is increased and the amount of labour remains fixed, output increases but at a decreasing rate

d. as the amount of capital increases and the amount of labour remains fixed, output cannot increase

e. labour inputs have a bigger impact on increasing output than capital inputs