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Question 4: True, False, Uncertain (1 pts each) Note: NO credit is given for your response true, false or uncertain. You must give your reasoning.

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Question 4: True, False, Uncertain (1 pts each) Note: NO credit is given for your response true, false or uncertain. You must give your reasoning. a) TFU: The figure below of the growth in income per capita over time as a function of initial real GDP per capita shows good evidence of an income-based "poverty trap" in which poor countries are trapped at poverty and cannot grow because they are poor. Figure 4.9 Growth Rate Versus Level of Real GDP per Person for a Broad Group of Countries .08 7 06 .04 Growth rate, 1960-2090 02 10 O O -.02 - -.04 150 400 1100 3000 8100 22000 Real GDP per person in 1960 Figure 2: Use this figure to answer question (3a). b) TFU: The Solow growth model tells us that a flood of immigrants will, in the long run, raise in- terest rates and reduce wages.c) What variables must be held constant to find convergence in the model and in the data on all countries

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