1. The Rule of 70 applies in any growth rate application. Let's say you have $1000 in savings and you have three alternatives for investing these funds.
a. A savings account earning 1% interest per year.
b. A U.S. Treasury bond mutual fund earning 3% interest per year.
c. A stock market mutual fund earning 8% interest per year.
d. How long would it take to double your savings in each of these 3 accounts?
2) Modern economic theory points to three sources of economic growth. What are these three sources? Give an example of each.
3) Explain why a nation cannot continue to grow forever just by adding capital.
4) The Solow model focus on how resources affect output. This module/week, you focused on capital.
a. Name the other two major categories of resources.
b. Draw an aggregate production function with a typical shape; label this function F. (label all curves and axis).
c. Draw a second production function that indicates a technological advancement; label this new function F1. (label all curves and axis).?