Answer the following questions, using appropriate diagrams to help explain your answers where necessary. Remember to correctly cite and reference any sources that you use although researched answers are not required and it is preferable to write from your understanding of the course material as you would have to do in a traditional exam. 1. A very poor country would have a relatively low amount of capital per worker compared to a very rich country.

a) The Solow model predicts that both a poor country and a rich country will in the long run converge to the same growth rate of per capita income. Use the Solow model to explain why this is so.

b) Discuss some factors which might prevent the prediction in (a) happening.