Use the spreadsheet calculations you did for Module 1, or the spreadsheet answers on the Answers page. Calculate the average real GDP growth rates by...
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Use the spreadsheet calculations you did for Module 1, or the spreadsheet answers on the Answers page. Calculate

the average real GDP growth rates by decade. In which decade was average real GDP growth the highest?

a.   The 1960's.

b.   The 1970's.

c.   The 1980's.

d.   The 1990's.

Study the real GDP growth rates in each decade from the 1960's to the 1990's. Which of the following statements is most correct?

a.   There were two years of decline in the 1960s, the 1970s started with a severe output decline and then saw rapid growth in the middle of the decade, the 1980s saw high growth rates in the second half of the decade, and real GDP growth was highest during the 1990s.

b.   Real GDP growth was highest during the 1960s, there were two years of decline in the 1970s, the 1980s started with a severe output decline and then saw rapid growth in the middle of the decade, and the 1990s saw high growth rates in the second half of the decade.

c.   The 1960s saw high growth rates in the second half of the decade, real GDP growth was highest during the 1970s, there were two years of decline in the 1980s, and the 1990s started with a severe output decline and then saw rapid growth in the middle of the decade.

Consider the goods market in our macroeconomic model, where real output on the horizontal axis is measured by real GDP. From spreadsheet assignment #1, consider the changes in real GDP, as measured by the real GDP growth rates, from 2015 to 2018. Which two changes could cause such changes in real GDP?

a.   An increase in aggregate demand and an increase in aggregate supply.

b.   A decrease in aggregate demand and an increase in aggregate supply.

c.   An increase in aggregate demand and a decrease in aggregate supply.

d.   A decrease in aggregate demand and a decrease in aggregate supply.

Consider the goods market in our macroeconomic model. Which two changes could cause an increase in real GDP?

a.   A fall in oil prices and an increase in consumer spending.

b.   A decrease in government purchases and perfect weather for agriculture.

c.   A decrease in import spending and many severe hurricanes during hurricane season.

d.   A rise in oil prices and a decrease in investment spending.

Consider second shift #2, where changes in the money market affect the goods market. Which changes in the money market could cause an increase in real GDP in the goods market?

a.   An increase in the bank reserve ratio leading to an increase in the money supply.

b.   A decrease in the bank reserve ratio leading to an increase in the money supply.

c.   A decrease in the bank reserve ratio leading to a decrease in the money supply.

d.   An increase in the bank reserve ratio leading to a decrease in the money supply.

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