Chapter 6 - Economic Growth(100% Verified)

Chapter 6 - Economic Growth(100% Verified)
1) The best definition for economic growth is
A) a sustained expansion of production possibilities measured as the increase in real GDP over a
given period.
B) a sustained expansion of production possibilities measured as the increase in nominal GDP
over a given period.
C) a sustained expansion of consumption goods over a given period.
D) a sustained expansion of production goods over a given period. correct answersA

2) Economic growth is measured by
A) changes in real GDP.
B) changes in nominal GDP.
C) changes in the employment rate.
D) All of the above are used to measure economic growth. correct answersA

3) We are interested in long-term growth primarily because it brings
A) higher price levels.
B) lower price levels.
C) higher standards of living.
D) trade wars with our trading partners. correct answersC

4) If a nationʹs population grows, then,
A) growth in real GDP per person will be less than the growth of real GDP.
B) there can be no economic growth.
C) growth in real GDP per person will be greater than the growth of real GDP.
D) there must be an increase in real GDP per person. correct answersA

5) In 2008, Armenia had a real GDP of $4.21 billion and a population of 2.98 million. In 2009,
real GDP was $4.59 billion and population was 2.97 million. What was Armeniaʹs economic
growth rate from 2008 to 2009?
A) 0.38 percent
B) 9.0 percent
C) 3.8 percent
D) 8.3 percent correct answersB

6) In 2008, Armenia had a real GDP of approximately $4.21 billion and a population of 2.98
million. In 2009, real GDP was $4.59 billion and population was 2.97 million. From 2008 to
2009, Armeniaʹs standard of living ________.
A) increased
B) decreased
C) did not change
D) might have increased, decreased, or remained unchanged but more information is needed to
determine which. correct answersA

7) In 2008, Armenia had a real GDP of approximately $4.21 billion and a population of 2.98
million. In 2009, real GDP was $4.59 billion and population was 2.97 million. Armeniaʹs real

,GDP per person in 2009 was
A) $1,545B) $380
C) $1,413
D) $132 correct answersA

8) During 2011, the country of Economia had a real GDP of $115 billion and the population was
0.9 billion. In 2010, real GDP was 105 billion and the population was 0.85 billion. In 2011, real
GDP per person was
A) $128
B) $124
C) $135
D) $117 correct answersA

9) During 2011, the country of Economia had a real GDP of $115 billion and the population was
0.9 billion. In 2010, real GDP was 105 billion and the population was 0.85 billion. In 2010, real
GDP per person was
A) $128
B) $124C) $135
D) $117 correct answersB

10) Suppose real GDP for a country is $13 trillion in 2007, $14 trillion in 2008, $15 trillion in
2009, and $16 trillion in 2010. Over this time period, the real GDP growth rate is
A) increasing.
B) decreasing.
C) constant.
D) negative. correct answersB

11) Suppose that in 2009 a country has a population of 1 million and real GDP of $1 billion. In
2010, the population is 1.1 million and the real GDP is $1.1 billion. The real GDP per person
growth rate is
A) $1000.
B) positive.
C) negative.
D) zero. correct answersD

12) During 2009, the country of Economia had a real GDP of $115 billion and the population
was 0.9 billion. In 2008, real GDP was 105 billion and the population was 0.85 billion.
Economiaʹs growth rate of real GDP per person is
A) 3.23 percent
B) 5 percent
C) 5.88 percent
D) 9.52 percent correct answersA

13) Suppose a nationʹs population grows by 2 percent and, at the same time, its GDP grows by 5
percent. Approximately how fast will real GDP per person increase?
A) 3 percent per year

,B) 2 percent per year
C) 5
D) 10 percent per year correct answersA

14) Which of the following is used to calculate the standard of living?
A) real GDP/population
B) ((real GDP in the current year — real GDP in previous year)/real GDP in previous year) x
100
C) the one-third rule
D) real GDP/aggregate hours correct answersA

15) The Rule of 70 is used to
A) estimate how much of an economyʹs growth rate is due to increases in capital per hour of
labor
B) calculate the standard of living
C) calculate the economyʹs growth rate
D) estimate how long it will take the level of any variable to double correct answersD

16) Using the Rule of 70, if the country of Flowerdomʹs current growth rate of real GDP per
person was 7 percent a year, how long would it take the countryʹs real GDP per person to
double?
A) 1 year
B) 2 years
C) 10 years
D) 49 years correct answersC

17) Using the Rule of 70, if the country of Flowerdomʹs current growth rate of real GDP per
person was 10 percent a year, how long would it take the countryʹs real GDP per person to
double?
A) 0.7 years
B) 1 year
C) 7 years
D) 10 years correct answersC

18) Slowdoniaʹs current growth rate of real GDP per person is 2 percent a year. How long will it
take to double real GDP per person?
A) half a year
B) approximately 10 years
C) 28.6 years
D) 35 years correct answersD

19) Slowdoniaʹs current growth rate of real GDP per person is 1 percent a year. Approximately
how long will it take to double real GDP per person?
A) 10 year 2
B) 35 years
C) 70 years

, D) 100 years correct answersC

20) If real GDP per person is growing at 4 percent per year, approximately how many years will
it take to double?
A) 17.5
B) 25
C) 4
D) 8 correct answersA

21) Suppose a country is producing $20 million of real GDP. If the economy grows at 10 percent
per year, approximately how many years will to take for real GDP to grow to $80 million?
A) 14
B) 7
C) 4
D) 30 correct answersA

22) Real GDP per person in the country of Flip is $10,000, and the growth rate is 10 percent a
year.
Real GDP per person in the country of Flap is $20,000 and the growth rate is 5 percent a year.
When will real GDP per person be greater in Flip than in Flap?
A) in 2 years
B) in 15 years
C) never
D) in 10 years correct answersB

2 Economic Growth Trends
1) Over the last 100 years, the average U.S. growth rate in real GDP per person was about
A) 2 percent per year. B) 6 percent per year.
C) 12.5 percent per year.
D) 1 percent per year. correct answersA

2) Over the past 100 years, real GDP per person in the United States has grown at an average of
________ percent a year.
A) 1
B) 2
C) 3
D) 4 correct answersB

3) The growth rate of real GDP per person in the United States has
A) averaged approximately 2 percent per year over the past century.
B) has consistently been 2 percent per decade over the past century.
C) has been the highest in the world over the past 5 decades.
D) has increased every year over the past century. correct answersA

4) Over the past 100 years real GDP per person in the United States, on average, has
A) decreased by about 5 percent per year.