ECON-B 251 Canvas Quiz 2 and
answers
In the Solow growth model, a sudden increase in the death rate of the working age
adult population leads to
a. an increase in growth
b. fluctuations in growth
c. a decrease in growth
d. constant growth✔✔a
In the Solow growth model, imagine that the Bubonic Plague kills a large fraction of
the population within a few months. Then we would predict
a. the price of land to fall
b. the price of land to first fall and then rise
c. the price of land to fluctuate
d. the price of land to rise✔✔b
In the Solow model, imagine that the Bubonic plague kills a large fraction of the
population and that as a consequence the income per capita of the survivors rises
rapidly. After this initial period, we would expect income per capita to
a. keep rising
b. fall back below the preexisting level
c. stay constant at that high level
d. fall back to the pre-existing level✔✔d
In the Solow growth model, imagine that the Bubonic plague kills a large fraction of
the population and, as a consequence, the level of income per capita rises very fast.
After this episode, we would expect the level income per capita to
a. fall fast
b. rise fast
c. fall slowly
d. rise slowly✔✔c
Consider the Solow growth model where the government finances a pay as you go
social security system. Each period the government budget is balanced. Now
imagine there is an epidemic that kills a large fraction of retired people. This allows
the government to cut taxes to fund the social security system. As a consequence,
we would expect
a. the economy to grow faster
b. the growth rate of the economy to be constant
c. the economy to grow more slowly
d. the growth rate of the economy to decline✔✔a
answers
In the Solow growth model, a sudden increase in the death rate of the working age
adult population leads to
a. an increase in growth
b. fluctuations in growth
c. a decrease in growth
d. constant growth✔✔a
In the Solow growth model, imagine that the Bubonic Plague kills a large fraction of
the population within a few months. Then we would predict
a. the price of land to fall
b. the price of land to first fall and then rise
c. the price of land to fluctuate
d. the price of land to rise✔✔b
In the Solow model, imagine that the Bubonic plague kills a large fraction of the
population and that as a consequence the income per capita of the survivors rises
rapidly. After this initial period, we would expect income per capita to
a. keep rising
b. fall back below the preexisting level
c. stay constant at that high level
d. fall back to the pre-existing level✔✔d
In the Solow growth model, imagine that the Bubonic plague kills a large fraction of
the population and, as a consequence, the level of income per capita rises very fast.
After this episode, we would expect the level income per capita to
a. fall fast
b. rise fast
c. fall slowly
d. rise slowly✔✔c
Consider the Solow growth model where the government finances a pay as you go
social security system. Each period the government budget is balanced. Now
imagine there is an epidemic that kills a large fraction of retired people. This allows
the government to cut taxes to fund the social security system. As a consequence,
we would expect
a. the economy to grow faster
b. the growth rate of the economy to be constant
c. the economy to grow more slowly
d. the growth rate of the economy to decline✔✔a
