Please write two one paragraph typed (#12 font size single space) statements on the same page commenting on the following statements. The total length of your combined two statements cannot exceed one page so you must be succinct:

1. “If an economy’s GDP grows at 2% a year, the GDP will double every 50 years.” 
A. Discuss.
B. What two adjustments are normally made to GDP or GNP to get a better sense of an economy's performance?
C.Making these adjustments what was the American economy's growth rate between 1950-2000?

See HSUS, Ca, National Income and Product and explore relevant graphs, tables, and series for reading and guidance.  Table Ca-C is interesting.
Check this out for a hint:   http://www.investopedia.com/ask/answers/04/040104.asp


2. “A country has a net (after depreciation) saving rate of 10% and the country earns a net real rate of return of 10%.”
A. If there are no other changes underway, how fast will this country grow?
B. How does the assumed 10% rate of saving compare to actual historic rates for the U.S. between 1950-2000?  You can just eyeball this or cut and paste into excell to get a percise number--I do not care.  (The assumed 10% rate of return is probably considerable higher that what actually occured--assume the actual rate of return was 5%.)
C. Using the actual rates of saving and the 5% rate of  return, how fast would you expect the U.S. to have grown from 1950-2000?
D. How does your growth rate compare to the growth rate you found in question 1. How do your findings relate to our understanding of the sources of modern economic growth?

See the essay by Richard Sutch, ”Saving, Capital, and Wealth,” in HSUS, Section Ce for some guidance.  See Figure Ce-B or series Ce126.

Please print two copies.  Turn in one copy for grading before the start of lecture #3 on April 8th:  Papers not turned in by 1:40 before I start the lecture will not be accepted.  Please bring your second copy to the section for discussions on April 10th.  Papers without your name and section number and section time at the top of the page with not be accepted. If you cannot be in the lecture by 1:40 pm, it is your responsibility to have someone else turn in your paper on your behalf.


Problem Set 2:
Due in Class Before the Start of Lecture on April 29th

Use the HSUS website to answer the following questions (you should provide at least 2 graphs, which can be created either using the website’s “graph” feature or by downloading the data into Excel and creating your own graph there—the latter option is easier):

1. How did the composition of the foreign-born population change, by country of origin, over the period 1850-1910? Hint: construct a couple of pie charts showing the composition of immigrants for 2 different census years. You should add some details from the Carter-Sutch article to add further weight to your observations in the data.

2. What do Carter and Sutch have to say about changes in immigrant quality over time?