Year

Alta (real GDP)

ZorD f rea', GpP)

Alta (popuJatioDl

1 2 3

$2,000 2,100 2,200

$150,000 152,000 154,000

200 202 210

Zom .cpopu!ation),

5. Refer to the above table. Between years 1 and 2, real GDP grew by a) 3 percent. b) 4 percent. c) 5 percent. d) 10 percent. Answer:

500 505 508

percent in AHa:

6. Refer to the above table. Between years 1 and 2, real GDP per capita grew by a) 3 b) 4 c) 5 d) 10

percent in AHa:

A_Tlswer:

7. Between years 2 and 3: a) Alta's real GDP grew more rapidly than Zom's real GDP. b) real GDP fell in Zom. c) population growth reduced Alta's real GDP growth to zero. d) population fell in Alta's. Answer:

8. Per capita GDP was about: a) $105 in year 3 in Alta. b) $303 in year 3 in Zom. c) $200 in year 1 in Zom. d) $5 in year 2 in AHa. Answer:

,e

(1) "'C

o O' C)

(ij ..... 'e.

IA .--------

cu

u

'D o

Consumer goods

14. Refer to the above diagram. Realized economic growth is best represented by a: a) shift in the production possibilities curve from AB to CD. c) shift in the production possibilities curve trom CD to .4B. b) move from x on AB to y on CD. d) move from x to z along AB. Answer:

15. Refer to the above diagram. The most likely cause of a shift from AB to CD would be aCn): a) increase in productivity. b) increase in the price level. c) decrease inthe size ofthe labor fOfce. d) fecession. Answer:

16. An outward shift of a nation's production possibilities curve: a) ensures the nation of an increase in real GDP per capita. b) ensures the nation of an increase in real GDP?but notofreal GDP per capita. c) neither ensures a nation of an increase in real GDP nor af anincr,easein,real GDPper capita. d) corresponds to a leftward shift a nation's long-run aggregate supply curve. Answer:

1.

Economic growth is best defmed as an increase in: a) either rea1 GDP or real GDP per capita. Answer:

b) nominal GDP.

c) total consumption expenditures.

d) wealth in the economy.

2. Real GDP per capita is found by: a) adding real GDP and population. b) subtracting population from real GDP. Answer:

c) dividing real GDP by population. d) dividing population by real GDP.

3. Growth is advantageous to a nation because it: a) promotes faster population growth. b) lessens the burden of scarcity. Answer:

c) eliminates the economizing problem. d) slows the growth of wants.

4.

For of comparing changes in potential military strength and political preeminence, wruch measure of economic growth would be most meaningful? a) changes in total nominal output b) changes in total real output Answer:

c) changes in per capita output d) changesin per:family output