1) The lower birth rate in China:

A. Will solve its population problem leading to a rapid growth in real GDP per capita as GDP will increase more than its population.

B. Will result in a labor force containing more educated and healthier young workers, resulting in a rapid growth of its real GDP per capita.

C. Will help China to maintain its high rates of productivity growth, due to the transition from a centrally planned economy to a market economy so China’s growth rate in real GDP per capita is likely to decrease.

D. Will shrink its labor force, which will include mostly less educated and less healthy older, workers, resulting in a slower growth in its real GDP per capita.

2) China has experienced:

A. Slow growth in the short run but their experiment will demonstrate that the country can maintain high rates of economic growth in the long run while its citizens are denied political freedoms.

B. A high long-term growth by spending 50 percent of GDP on investment, but the government may have boosted this growth at the expense of the health of the economy in the short run.

C. High rates of growth in the short run by spending heavily on physical capital, infrastructure, and property but their lack of democracy can slow growth in the long run.

D. Moderate growth in the short run by spending heavily on physical capital, infrastructure, and property but their growth potential in the long run is much higher.