# 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

© 2010 Pearson Education Canada

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

© 2010 Pearson Education Canada

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

© 2010 Pearson Education Canada