Chapter 7 Notes and multiple choice

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Chapter 7—Production and Growth
MULTIPLE CHOICE
1. Which of the following is the most appropriate measure of a nation’s standard of living?
a
.
real GDP
b
.
real GDP per person
c
.
nominal GDP
d
.
nominal GDP per person
ANS: B PTS: 1 DIF: Easy REF: p. 141-142
BLM: Remember NOT: Macro TB_7-1
2. Which of the following statements best explains the importance of real GDP per person?
a
.
It is a useful measure of economic growth.
b
.
It is a useful measure of a country’s wealth.
c
.
It is a useful measure of the cost of living.
d
.
It is a useful measure of well-being.
ANS: D PTS: 1 DIF: Easy REF: p. 141-142
BLM: Remember NOT: Macro TB_7-2
3. Which of the following best describes changes in the average well-being in a country?
a
.
the growth rate of government transfers
b
.
the growth rate of nominal GDP
c
.
the growth rate of real GDP
d
.
the growth rate of real GDP per person
ANS: D PTS: 1 DIF: Easy REF: p. 141-142
BLM: Higher Order NOT: Macro TB_7-3
4. How does income in developing countries like Pakistan and Bangladesh compare with that in Japan
and Canada?
a
.
It’s about 1/10 or less of that in developed countries like Japan and Canada.
b
.
It’s about 1/8 of that in developed countries like Japan and Canada.
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c
.
It’s about 1/5 of that in developed countries like Japan and Canada.
d
.
It’s about 1/3 to 1/2 of that in developed countries like Japan and Canada.
ANS: A PTS: 1 DIF: Easy REF: p. 142-144
BLM: Remember NOT: Macro TB_7-4
5. Over the past century in Canada, by how much has real GDP per person grown?
a
.
by about 1 percent per year
b
.
by about 2 percent per year
c
.
by about 4 percent per year
d
.
by about 6 percent per year
ANS: B PTS: 1 DIF: Easy REF: p. 142-144
BLM: Remember NOT: Macro TB_7-5
6. In approximately how many years will real GDP per person in Canada double, given its average
growth rate during the past century?
a
.
100 years
b
.
70 years
c
.
35 years
d
.
25 years
ANS: C PTS: 1 DIF: Easy REF: p. 142-144
BLM: Higher Order NOT: Macro TB_7-6
7. Over the past 100 years, Canadian real GDP per person has doubled about every 35 years. If in the
next 100 years it doubles every 25 years, then what will Canadian real GDP per person be a century
from now?
a
.
4 times higher than it is now
b
.
8 times higher than it is now
c
.
12 times higher than it is now
d
.
16 times higher than it is now
ANS: D PTS: 1 DIF: Average REF: p. 142-144
BLM: Higher Order NOT: Macro TB_7-7
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8. Which of the following statements best characterizes the variations in real GDP per person and its rate
of growth across countries?
a
.
Real GDP per person differs widely across countries, but the growth rate of real GDP per
person is similar across countries.
b
.
Real GDP per person is very similar across countries, but the growth rate of real GDP per
person differs widely across countries.
c
.
Real GDP per person and the growth rate of real GDP per person are similar across
countries.
d
.
Real GDP per person and the growth rate of real GDP per person vary widely across
countries.
ANS: D PTS: 1 DIF: Easy REF: p. 142-144
BLM: Remember NOT: Macro TB_7-8
9. Over the past century in Canada, by how much has average income grown as measured by real GDP
per person?
a
.
about 3.5 percent per year, which implies a doubling about every 20 years
b
.
about 2 percent per year, which implies a doubling about every 35 years
c
.
about 4 percent per year, which implies a doubling about every 17.5 years
d
.
about 1 percent per year, which implies a doubling about every 70 years
ANS: B PTS: 1 DIF: Easy REF: p. 142-144
BLM: Remember NOT: Macro TB_7-9
10. As measured by real GDP per person, approximately how much higher is average income in Canada
today than it was a century ago?
a
.
2 times higher
b
.
4 times higher
c
.
6 times higher
d
.
8 times higher
ANS: D PTS: 1 DIF: Easy REF: p. 142-144
BLM: Remember NOT: Macro TB_7-10
11. How does income per person in Canada compare with income per person in China and India?
a
.
It is about 4 times that in China and 8 times that in India.
b
.
It is about 6 times that in China and 12 times that in India.
c
.
It is about 12 times that in China and 6 times that in India.
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