4. (10 points) Consider the following S-curve (really a sideways-M-curve) diagram: 45 Individual Investment Average Investment (a) (3 points) Label the equilibrium points on the graph. (You will have to redraw the curve and label the equilibrium points). (b) (3 points) Classify each equilibrium as stable or unstable. (c) (4 points) Suppose that average investment is currently at point A. Where will average investment eventually end up? Show the dynamics on the graph by drawing arrows. 5. (7 points) Describe Kuznet's inverted-U hypothesis and illustrate the hypothesis with a graph. Is there empirical evidence in support of the hypothesis? (Be brief, aim for 3-7 sentences) 6. (7 points) Describe the total poverty gap intuitively. What does it measure and why is it more informative than the headcount ratio index? (Be brief, aim for 3-7 sentences) 4. (10 points) Consider the following S-curve (really a sideways-M-curve) diagram: 45 Individual Investment Average Investment (a) (3 points) Label the equilibrium points on the graph. (You will have to redraw the curve and label the equilibrium points). (b) (3 points) Classify each equilibrium as stable or unstable. (c) (4 points) Suppose that average investment is currently at point A. Where will average investment eventually end up? Show the dynamics on the graph by drawing arrows. 5. (7 points) Describe Kuznet's inverted-U hypothesis and illustrate the hypothesis with a graph. Is there empirical evidence in support of the hypothesis? (Be brief, aim for 3-7 sentences) 6. (7 points) Describe the total poverty gap intuitively. What does it measure and why is it more informative than the headcount ratio index? (Be brief, aim for 3-7 sentences)