1.Describe two ways the U.S. government tries to encourage advances in technological knowledge.

2.Suppose that society decided to reduce consumption and increase investment.

a.How would this change affect economic growth?

b.What groups in society would benefit from this change? What groups might be hurt?

3.International data show a positive correlation between income per person and the health of the population.

a.Explain how higher income might cause better health outcomes.

b.Explain how better health outcomes might cause higher income.

c.How might the relative importance of your two hypotheses be relevant for public policy?

4.Explain how higher saving leads to a higher standard of living. What might deter a policymaker from trying to raise the rate of saving?