Each question is worth5 marks, for a total of20 marks. In each case, you mustanswer 'True' or 'False', and thenexplain your choice in 2 sentences. You will receive 1 mark for a correct answer, and the other 4 marks will be awarded according to the quality of your explanation.

1)True or False?A country whose GDP per capita grows by 7% every year would see its GDP per capitatripleafter 20 years. [Hint: you should not need a calculator for this question.]

2)Consider the following two income distributions, for two hypothetical countries, A and B:

A = (2, 3, 5, 10, 10)

B = (2, 5, 5, 8, 10)

Each value represents the income per day (measured in dollars) of an individual in the country (or, equivalently, a group of individuals of equal size).

True or False?According to the Lorenz criterion, it must be that inequality is higher for country A than for country B. [Hint:you do not need a calculator for this question.]

3)In 2015, there were roughly 730 million people living below the poverty line of $1.90/day-when adjusting incomes for purchasing power parity (PPP) differences.

True or False?If we used nominal exchange rates instead of PPP-adjusted exchange rates to measure incomes, we would find that the number of people in the world living below the poverty line of $1.90/day would be even higher.

4)Consider the Solow Model with labour-augmenting technological progress. Further, say that=3%,n=2%,s=20%and=3%.

True or False?If?(capital per unit ofeffectivelabour) is less than the steady-state value of?,thenK(the aggregate level of capital in the economy) must be growing at a ratefasterthan 5%.