1. A country has the per-worker production function: Yt = 6k?3 where y, is output per worker and k, is the capital-labor ratio. The depreciation rate is 0.1 and the population growth rate is 0.1. The saving function is St = 0.1Y; where S, is total national saving and Y, is total output.

Suppose a country’s total output is growing 10 percent per year, but its population is growing 11 percent per year. What will happen to living standards?   a. Rise. b. Fall. c. Remain the same.

Must we have inequality for economic growth? A. Yes, disparities in income and wealth encourage hard work and saving. B. Yes, the richer individuals are in society, the more they can invest their capital in society and produce jobs for all. C. No, inequality stymies economic growth. More unequal nations grow less quickly than more equal societies - potentially due to speculative spending, and low healthcare outcomes and educational attainment for poorer people leading to less productivity.  D. No, it is mean spirited and makes people dislike each other.

Last year, real GDP per person was $4,200. The year before it was $4,000. By what percentage did real GDP per person grow during the period? a. 200 percent b. 10 percent c. 5 percent d. 50 percent.