Two well known economists, William Baumol and Alan Blinder, have stated that, in the long run, \"nothing contributes more to reduction of poverty, to increases in leisure, and to the country's ability to finance education, public health, environmental improvement and the arts" than the rate of growth of productivity.1 1. Define productivity. 2. See if you can verify Baumol and Bh'nder's very strong claim ("nothing contributes more...") through the following exercise. Assume GNP in the U.S is $5 trillion, and that the labor force remains constant in size and fully employed. Estimate the value in GNP in one years' time if productivity growth is 3%. What if it were only 2%? How much will GNP fall in two years time if productivity growth remains at 2% rather than 3%? In three years? 3. Why might environmental regulation reduce productivity growth? 4. Why might it increase productivity growth? 5. Even ifenvironmental regulation has not reduced productivity growth, are negative productivity impacts from regulations something we should still worry about