Bonus Quiz #4 Economic Issues 2D03 Wednesday October 30, 2013
There are 10 True-False Questions. Read the questions carefully. If a part of a statement
is false, then the whole statement is false. Use scan sheet to circle A if the statement is
true (T) and circle B if the statement is false (F).
1. The production function in an economy is y = k , where y is the output per
labour and k is the capital labour ratio. In this economy, higher level of output per
labour requires higher capital-labour ratio.
2. The production function in an economy is y = k , where y is the output per
labour and k is the capital labour ratio. If k increases by 20 percent in this
economy, then labour productivity also increases by 20 percent.
3. High labour productivity is associated high investment per person, high saving
person and high capital intensity per person. On the other hand, high rate of
population growth is associated with low levels of income per person.
4. Consider Solow growth model in two economies, A and B. Both economies are
identical in all respects, except marginal propensity to save (mps). If mps is
higher in A than that in B, then A w