The article below provides some context for Questions 1A and 1B

Time Magazine, March 12, 2013 Can China Escape the Middle-Income Trap?

(QUESTION 1A) "... countries with especially high rates of growth when poorer are more likely to slow down at the middle-income level." Using the neoclassical (Solow) growth model, explain why the statement above may be true. (6 marks)

(QUESTION 1B) "As costs rise and these basic industries become less competitive, countries need to start developing their own intellectual property and improving the skills of the workforce to compete in high-technology industries." Using the concept of technology and the Solow-residual (Total Factor Productivity), explain how investment in intellectual property and technology can help a country grow and avoid the problem highlighted in Question 1. (4 marks)