1. Using the Harrod-Domar model to prove that the sum of the population growth rate (n) and productivity improvement (p) is smaller than the ratio of the saving (s) and capital-output rates (c). (4 Marks)

Hint: Using the mathematical notation of each variable to explain the economic relationships among each defined variable.

2. The economic growth (g) is around 5.9% in China, and please calculate the corresponding saving rate (s) using the results from the previous question.(4 Marks)

Note that the depreciation rate (d) is 0.03, and the capital-output rate (c) is 3.

3. In the absence of such a savings rate, list at least two possible policies to raise the savings.(2 Marks)