According to the Solow–Swan model, if total factor productivity rises, then:

Consider a basic Solow–Swan model with constant labour force L and constant total factor productivity A. Suppose the saving rate is 𝑠=0.3 and the depreciation rate is 𝛿=0.05 . Suppose also that steady-state output per worker is 100. Steady state investment per worker is:

Consider the Solow-Swan model. Which of the following statements is FALSE?Group of answer choicesThe higher the saving rate the higher the steady state level of capital per workerIn steady state, output per worker does not depend on the level of total factor productivityThe higher the depreciation rate the lower the steady state level of capital per workerIf investment is greater than total depreciation, the capital stock increases

Consider a basic Solow–Swan model. Suppose the aggregate production function is 𝑌=𝐴𝐾12𝐿12 and that A=1 , the depreciation rate is 𝛿=0.06  and the saving rate is 𝑠=0.12. In steady state, which of the following is TRUE?Group of answer choicesOutput per worker is 2.00 and consumption per worker is 0.24Output per worker is 2.00 and consumption per worker is 1.76Output per worker is 1.68 and consumption per worker is 1.48Output per worker is 1.68 and consumption per worker is 1.12

The country of Swan is very wealthy, with a high level of per capita income and capital. The country of Solow is quite poor, with low levels of per capita income and capital. Both countries have the same production function, Y = Af(K, L), and both countries are described by the Solow–Swan growth model. Assuming the two countries have the same steady state per capita income, then:Group of answer choicesSolow will grow more quickly than Swanas the two economies have the same steady state, they must grow at the same rateSwan will see its per capita income decline, while Solow will see its per capita income riseSwan will grow more quickly than Solow

In the production function of the standard production model, the productivity parameter enters the equation with an exponent of one, while in the Solow-Swan model’s equation for the steady-state stock of capital, it is greater than one becauseQuestion 21AnswerSelect one:a.the exogenous level of the capital stock itself depends on productivity.b.the productivity measure is negative in the Solow model.c.there is no productivity parameter in the production function model.d.the productivity measure is zero in the production function model.e.the endogenous level of the capital stock itself depends on productivity.