Solow Growth Model Quiz
Test your understanding of the Solow Growth Model with this comprehensive quiz.
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First Name
Last Name
Email Address
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example@example.com
Which of the following is NOT an assumption of the Solow Growth Model?
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Closed economy with no government
Constant returns to scale production function
Increasing marginal product of capital
Exogenous savings rate
Select all factors that contribute to long-run economic growth in the Solow Model.
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Technological progress
Population growth
Increase in the savings rate
Short-term government spending
Other
Match the Solow Model variables with their meanings.
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Rows
k (lowercase k)
y (lowercase y)
s (lowercase s)
δ (delta)
Variable Meaning
Capital per worker
Output per worker
Savings rate
Depreciation rate
Capital per worker
Output per worker
Savings rate
Depreciation rate
Capital per worker
Output per worker
Savings rate
Depreciation rate
Capital per worker
Output per worker
Savings rate
Depreciation rate
Suppose the savings rate in an economy increases. According to the Solow Model, what happens to the steady-state level of capital per worker?
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It increases
It decreases
It remains unchanged
It fluctuates randomly
If the depreciation rate increases, what is the immediate effect on the capital stock in the Solow Model?
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Capital stock increases
Capital stock decreases
No effect
Capital stock doubles
Calculate the steady-state level of capital per worker (k*) given: savings rate (s) = 0.2, depreciation rate (δ) = 0.05, and output per worker (y) = k^0.5. Show your answer rounded to two decimal places.
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On a scale from 1 (Not confident) to 5 (Very confident), how confident are you in your understanding of the Solow Growth Model?
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Not confident
1
2
3
4
Very confident
5
1 is Not confident, 5 is Very confident
Which of the following statements about the steady state in the Solow Model is TRUE?
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At steady state, capital per worker and output per worker remain constant over time.
At steady state, the savings rate equals the depreciation rate.
At steady state, output per worker grows without bound.
At steady state, population growth is zero.
Briefly explain in your own words why technological progress is important in the Solow Growth Model.
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