Q1. Categorize each scenario place into one of the factors of economic growth: Technonlgy, institution, physical capital, human capital, or natural resources.

1. Provide free college education.
2. Send inspectors to discover more diamonds.
3. Encourage firms to build large factories
4. Reduce regulations for banks to lend out money.
5. Governemt builds more roads.
6. Government delays the retirement age.

Q2. On the balance sheet of Bank E, it has $300 million of deposits as a liability. Suppose Bank E has $80 million of reserve. Given that rr= 20% what is the maximum amount of money that Bank E can lend out?

Q3. Supose rr= 10% you deposit $400 into a bank. What is the maximum amount of new money created for the economy from your deposit via the money multiplying effect?

Q4. Nominal GDP of country B grows from $32 billion to $36 billion between 2016 and 2017. Suppose inflation is 3% and population growth rate is 1.5%. Calculate the economy growth rate between 2016 and 2017.

Suppose real GDP per capita doubles in 5 years. Annual population growth rate = 2%. Annual inflation rate = 1.5%. Calculate the approximate annual growth rate of nominal GDP.