Q1. Blue-eyed people are more likely to lose their expensive watches than are brown-eyed people. Specifically, there is an 80% probability to a blue- eyed individual will lose a $1000 watch during the year, but only a 20% probability to a brown-eyed individual will do so. In the population as a whole, half of the people are blue-eyed also half are brown-eyed.

Q2. Can an economy be faced with endless trade cycles also still have its Real GDP grow over time?