1. The rate of economic growth per capita in France from 1996 to 2000 was 1.9% per year, while in Korea over the same period it was 4.2%. Per capita real GDP was $28,900 in France in 2003, and $12,700 in Korea.

Assume the growth rates for each country remain the same.

a. Compute the doubling time for France's per capita real GDP.

b. Compute the doubling time for Korea's per capita real GDP.

c. What will France's per capita real GDP be in 2045?

d. What will Korea's per capita real GDP be in 2045?

( 2) Suppose the people in a certain economy decide to stop saving and instead use all their income for consumption. They do nothing to add to their stock of human or physical capital. Discuss the prospects for growth of such an economy.