CHAPTER 7

CHAPTER 7 - 1 The rate of economic growth is best defined...

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Dr. Anwar Alshriaan Chapter 8 review 111 1 1. The rate of economic growth is best defined as the: A) percentage increase in real GDP over time. B) increase in investment as a percentage of GDP over time. C) percentage increase in consumption expenditures over time. D) percentage increase in the quality of capital, human, and natural resources which occurs over time. 16 . Answer: A 26. Real GDP per capita: A) cannot grow more rapidly than real GDP. B) cannot grow more slowly than real GDP. C) necessarily grows more rapidly than real GDP. D) can grow either more slowly or more rapidly than real GDP. Answer: D 36. Which of the following best measures improvements in the standard of living of a nation? A) growth of nominal GDP B) growth of real GDP C) growth of real GDP per capita D) growth of national income Answer: C 5. If a nation's real GDP increases from 100 billion to 106 billion and its population jumps from 200 million to 212 million, it real GDP per capita will: A) remain constant. B) fall by 6 percent. C) rise by 6 percent. D) fall by 12 percent. Answer: A Use the following to answer questions 6 -9: 6. Refer to the above table. Between years 1 and 2, real GDP grew by __________ percent in Alta: A) 3 percent. B) 4 percent. C) 5 percent. D) 10 percent. Answer: C 7. Refer to the above table. Between years 1 and 2, real GDP per capita grew by __________ percent in Alta: A) 3 B) 4 C) 5 D) 10
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Dr. Anwar Alshriaan Chapter 8 review 111 2 Answer: B 8. Refer to the above table. Between years 2 and 3: A) Alta's real GDP grew more rapidly than Zorn's real GDP. B) real GDP fell in Zorn. C) population growth reduced Alta's real GDP growth to zero. D) population fell in Alta. Answer: A 9. Refer to the above table. Per capita GDP was about: A) $105 in year 3 in Alta. B) $303 in year 3 in Zorn. C) $200 in year 1 in Zorn. D) $5 in year 2 in Alta. Answer: B 10. Given the annual rate of economic growth, the "rule of 70" allows one to: A) determine the accompanying rate of inflation. B) calculate the size of the GDP gap. C) calculate the number of years required for real GDP to double. D) determine the growth rate of per capita GDP. Answer: C 11. Recurring upswings and downswings in an economy's real GDP over time are called: A) recessions. B) business cycles. C) output yo-yos. D) total product oscillations. Answer: B 12. In which of the following industries or sectors of the economy is output likely to be most strongly affected by the business cycle? A) military goods B) capital goods C) textile products D) agricultural commodities Answer: B 13. The phase of the business cycle in which real GDP declines is called: A) the peak. B) an expansion. C) a recession. D) the trough. Answer: C
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CHAPTER 7 - 1 The rate of economic growth is best defined...

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