1. If real GDP per capita in the United States is $8,000, what will real GDP per capita in the United States be after 5 years if real GDP per capita grows at an annual rate of 3.2%? (Show your work and explain your answers.)

2. Sweden has a population of 9.05 million, and a GDP of $3.85 billion. Ireland has a population of 4.21 million, and a GDP of $2.23 billion. Which country has a higher standard of living, and why? How did you determine who has the better living standard? (Reference any academic and non-academic articles used to make this determination.)

3. Movement between which points in the following diagram would reflectonlya change in technology? Movement between which points in the following diagram would reflectonlyan increase in the available capital per worker? If a country is already fairly wealthy, what should they concentrate more on: increasing capital per worker, or encouraging positive technological change? Why? (Explain each answer, do not just list letters.)

4. Absent any government action or policy, why might firms under-invest in research and development? What can be done (or has been done) to address this problem and help improve standards of living?