1. Although having abundant natural resources can be an advantage for a country, are they necessary to ensure economic growth and a prosperous economy?

2. Why does a small difference in the economic growth rate lead to big differences over time?

3. What are some ways in which countries can improve labor productivity?

4. In what ways do governments help to build technology and ideas?

5. Why is investment in human capital good for both individuals and fostering economic growth for the economy as a whole?

6. Why is a stable financial system important to economic growth?

7. The standard of living we enjoy today is largely due to the investments of earlier generations of Americans. Do you agree? Why or why not?

8. What role might foreign investment play in helping developing nations improve their growth rate and increase income levels?

9. Higher levels of savings and investment lead to greater rates of economic growth. What can government do to encourage more savings and investment?

10. Per capita income (or output) is the general measure used to compare the standards of living between countries. If a country’s population growth is higher than its economic growth, what happens to per capita income? What are some of the limitations to using per capita income as a measure to compare the well-being of different countries?

11. Energy independence has been a goal for many decades. But only in the past decade has the increased focus on renewable energy sources, such as solar, wind, and water, taken on greater significance. How does achieving energy independence contribute to labor productivity and economic growth?

12. One of the potential negative consequences of both economic and population growth is that we will eventually exhaust Earth’s natural resources, leading to our demise. What kind of activities might prevent this from happening?

13. The European Union faced many challenges in recent years, especially disparities in economic growth among member countries, to the point that citizens of the United Kingdom voted on whether they wished to remain in the EU or not. In 2015 average real GDP growth in the EU was 1.5%, while the top three fastest-growing members, the United Kingdom, Ireland, and Poland, achieved average growth of 3.3%. Is the effect of a 3.3% growth rate so different from that of 1.5%?

14. Finland consistently ranks very high in global rankings of educational achievement in science and math. This was a result of a transformation in Finland’s public education system to one that focuses on small class sizes and highly trained teachers for primary and secondary education, which is considered a highly prestigious profession. At the college level, many countries fully subsidize college tuition, and in Saudi Arabia, the King Abdullah Scholarship Program offers to send its citizens to study at many of the world’s prestigious universities for free. Explain how government investment in education could pay for itself in the long run.

15. In 2016 U.S. GDP was approximately $18 trillion, while India’s GDP was approximately $2.25 trillion. However, India is growing faster than the United States.

16. Suppose a new colony is created on the moon with the following production function: Output = A × (L + K + H + N). If L, K, H, and N each equal 5, and technology (A) equals 3, how much output would this new colony produce?

17. According to By the Numbers, approximately how many years did it take for real GDP per capita in the United States to double from $5,000 to $10,000? How about from $25,000 to $50,000? During which period was economic growth stronger in terms of annual growth?

18. According to By the Numbers, what is the range of life expectancies for the countries whose GDP per capita was less than $10,000 in 2015? Compare these life expectancies with those with GDP per capita greater than $35,000. Is there a strong correlation between GDP per capita and life expectancy?