Questions 1:

Please explain the impact of interest rates on residents’ savings and investments. (how the rising or decreasing of interest rates influence national savings and investments.

Question 2:

Please explain what is the crowding out effect and which factors will influence the crowding out effects.

Question 3:

The following policies are believed can foster economic growth; please discuss the disadvantages of each. (40 marks)

1. put more resources in producing the capital.
2. Encourage foreign investment.
3. Promote education, and enhance human capital.
4. Protect property rights and promote political stability.
5. Encourage free trade;
6. Reduce population growth rates,
7. Encourage research and development.