AP Macroeconomics Mods 37-40 - Economic Growth

What does Gross Domestic Product mean?

• The total value of all goods and services a country imports.

• The total value of all goods and services a country exports.

• The total value of all goods and services produced within a country in one year.

• The net loss in profits within a country due to imports.

A country's living standard is best measured by the:

• per capita nominal GDP.

• real GDP.

• nominal GDP.

• per capita real GDP.

• unemployment rate.

If a country has a population of 1,000, an area of 100 square miles, and a GDP of $5,000,000, then its GDP per capita is:

• $500.

• $5,000.

• $50,000.

• $5,000,000.

• $50

If aggregate real output is growing faster than the total population, then:

• real GDP per capita is rising.

• the standard of living is declining.

• the national income is falling.

• nominal GDP per capita is falling.

• the national income per capita is falling.

Suppose a panel of economists is predicting that a nation's real GDP per capita will double in approximately 10 years. Based upon the Rule of 70, what must be the predicted annual growth rate of real GDP per capita?

• 140%

• 7%

• 2.85%

• 14%

• 5%

The rule of 70 indicates that a 6% annual increase in the potential level of real GDP would lead to the potential output doubling in about _______ years.

• 6

• 12

• 24

• 30

• 35

Economists say that long-run economic growth is almost entirely due to:

• rising productivity.

• population growth.

• a democratically elected government.

• a balanced budget.

• perfectly competitive markets.

Dave has gone back to school to learn computer programming. Dave's investment in _____ should increase his own labor productivity.

• physical capital

• technology

• human capital

• financial capital

• environmental capital

Melanie owns a bakery and has just purchased new powerful mixing machines that will increase her daily output of baked goods. This is an example of an investment in:

• technology.

• physical capital.

• human capital.

• financial capital.

• environmental capital.

Which of the following choices would be a factor that contributes to a nation's rapid long-run economic growth?

• Faster technological progress.

• Faster population growth.

• Less physical capital per worker.

• Lower levels of average human capital.

• Higher tax rates on high-tech industries.