Economics 1022A/B Study Guide - Association To Advance Collegiate Schools Of Business, Potential Output, Pearson Education

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Economics: Canada in the Global Environment, 7e (Parkin)
Chapter 22 Economic Growth
22.1 The Basics of Economic Growth
1) Economic growth is
A) a sustained expansion of production possibilities measured as the increase in nominal GDP
over a given period.
B) a sustained expansion of consumption expenditure over a given period.
C) always accompanied by a rising price level.
D) equal to real GDP per capita multiplied by 70.
E) a sustained expansion of production possibilities measured as the increase in real GDP over a
given period.
Answer: E
Diff: 2
Topic: The Basics of Economic Growth
Skill: Recognition
AACSB: Reflective Thinking
2) In 2008, Armenia had 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 Armenia's economic
growth rate in 2009?
A) 0.38 percent
B) 3.8 percent
C) 8.3 percent
D) 9.0 percent
E) 11.1 percent
Answer: D
Topic: The Basics of Economic Growth
Skill: Analytical
AACSB: Analytical Skills
3) In 2008, Armenia had 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. Between 2008 and 2009, Armenia's
standard of living ________.
A) increased
B) decreased
C) did not change
D) might have increased, decreased, or remained unchanged
E) doubled.
Answer: A
Topic: The Basics of Economic Growth
Skill: Conceptual
AACSB: Analytical Skills
1
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4) In 2008, Armenia had 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. Armenia's real GDP per person in
2009 was
A) $1,545.
B) $380.
C) $1,413.
D) $132.
E) $1.41.
Answer: A
Topic: The Basics of Economic Growth
Skill: Analytical
AACSB: Analytical Skills
5) During 2009, the country of Economia had 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. In 2009,
real GDP per person was
A) $124.
B) $135.
C) $117.
D) $12,778.
E) $128.
Answer: E
Diff: 2
Topic: The Basics of Economic Growth
Skill: Analytical
AACSB: Analytical Skills
6) During 2009, the country of Economia had 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. In 2008,
real GDP per person was
A) $128.
B) $124.
C) $135.
D) $117.
E) $1,235.
Answer: B
Diff: 2
Topic: The Basics of Economic Growth
Skill: Analytical
AACSB: Analytical Skills
2
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7) Suppose a country's population grows by 2 percent a year and, at the same time, its real GDP
grows by 5 percent a year. Real GDP per person is increasing by ________ a year.
A) 2 percent
B) 5 percent
C) 10 percent
D) 16 percent
E) 3 percent
Answer: E
Topic: The Basics of Economic Growth
Skill: Analytical
AACSB: Analytical Skills
8) The Rule of 70 is used to
A) estimate how much of an economy's growth rate is attributable to increases in capital per hour
of labour.
B) calculate the standard of living.
C) calculate the economy's growth rate.
D) estimate how long it will take the level of any variable to double.
E) estimate how much of an economy's growth rate is attributable to technological advance.
Answer: D
Topic: The Basics of Economic Growth
Skill: Recognition
AACSB: Reflective Thinking
9) Using the Rule of 70, if the country of Flowerdom's current growth rate of real GDP per
person is 7 percent a year, how long will it take the country's real GDP per person to double?
A) 1 year
B) 2 years
C) 10 years
D) 49 years
E) 7 years
Answer: C
Diff: 2
Topic: The Basics of Economic Growth
Skill: Analytical
AACSB: Analytical Skills
3
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