Question 1

Suppose the nominal GDP of an economy was $100 billion in 2016 and $260 billion in 2017.The general price index was 100 in 2016 and 180 in 2017.During 2016-2017, the economy's real GDP rose by:

Accepted Answer

A)  160 percent.
B)  44 percent.
C)  37 percent.
D)  12 percent.E) B) and C)
F) None of the above

Question 2

If an economy's real GDP doubles in fourteen years, then the average annual rate of growth in real GDP is about:

Accepted Answer

A)  3 percent.
B)  4 percent.
C)  5 percent.
D)  6 percent.E) None of the above
F) B) and D)

Question 3

During the last decade, the innovations in computers and telecommunications, together with global competition, have resulted in:

Accepted Answer

A)  rational expectations theory.
B)  lower growth in capital stock.
C)  higher growth in labour force.
D)  higher productivity growth.E) B) and C)
F) A) and C)

Question 4

Refer to the above diagram.The most likely cause of a shift from AB to CD would be a(n) :

Accepted Answer

A)  increase in productivity.
B)  increase in the price level.
C)  decrease in the size of the labour force.
D)  recession.E) C) and D)
F) A) and B)

Question 5

Which of the following is an effect of economic growth on the burden of scarcity?

Accepted Answer

A)  A decrease in the burden
B)  An increase in the burden
C)  No effect on the burden
D)  None of the answer choices are correct.E) A) and B)
F) A) and C)

Question 6

A rightward shift of a nation's production possibilities curve is a necessary but not sufficient condition for economic growth.

Accepted Answer

A) True 
 B)False

Question 7

In Canada, the highest increase in the average annual rates of productivity growth was observed during the period of:

Accepted Answer

A)  1946-1973.
B)  1946-2015.
C)  1973-1981.
D)  2000-2015.E) A) and B)
F) A) and C)

Question 8

Over a year, a nation's GDP at current prices rose by 15 percent while the price index increased from 100 to 110.GDP at constant prices rose by about:

Accepted Answer

A)  3 percent.
B)  5 percent.
C)  7 percent.
D)  9 percent.E) B) and C)
F) C) and D)

Question 9

Real GDP was $9,950 billion in Year 1 and $10,270 billion in Year 2.What was the approximate rate of economic growth from Year 1 to Year 2?

Accepted Answer

A)  1.6 percent
B)  2.4 percent
C)  3.2 percent
D)  4.3 percentE) A) and B)
F) A) and C)

Question 10

The achievement of full employment through time will:

Accepted Answer

A)  diminish labour productivity.
B)  reduce the level of investment as a percentage of GDP.
C)  increase the rate of growth of real GDP.
D)  have no impact on the rate of growth of real GDP.E) A) and B)
F) A) and C)

Question 11

A decline in a nation's rate of productivity growth will:

Accepted Answer

A)  reduce the inflation rate.
B)  increase education and training.
C)  slow the growth of the standard of living.
D)  make industry more competitive in world markets.E) All of the above
F) A) and B)

Question 12

Productivity growth is a minor source of improvements in real wage rates and the standard of living.

Accepted Answer

A) True 
 B)False

Question 13

The historical reallocation of labour from agriculture to manufacturing in Canada has:

Accepted Answer

A)  been inflationary.
B)  had no effect upon the average productivity of labour.
C)  increased the average productivity of labour.
D)  reduced the average productivity of labour.E) A) and B)
F) All of the above

Question 14

Assume that an economy has 1500 workers, each working 2000 hours per year.If the average real output per worker-hour is $20, then total output or real GDP will be:

Accepted Answer

A)  $3 million.
B)  $30 million.
C)  $45 million.
D)  $60 million.E) All of the above
F) A) and C)

Question 15

Refer to the diagram below.A shift in the production possibilities curve from AB to CD is most likely due to:

Accepted Answer

A)  the use of the economy's resources in an efficient way.
B)  an increase in the spending of business and consumers.
C)  an increase in government purchase of the economy's output.
D)  an increase in the quantity and quality of labour resources.E) All of the above
F) C) and D)

Question 16

Economic growth can best be portrayed as a:

Accepted Answer

A)  leftward shift of the production possibilities curve.
B)  movement from a point inside to a point outside of the production possibilities curve.
C)  movement from a point near the vertical axis to a point near the horizontal axis on the production possibilities curve.
D)  rightward shift of the production possibilities curve.E) A) and B)
F) B) and C)

Question 17

Real GDP was $4,719 billion in Year 1 and $4,848 billion in Year 2.In contrast, real GDP per capita in Year 1 was $19,261, but in Year 2 it was only $19,162.Why did one measure increase while the other measure decreased?

Accepted Answer

A)  Real GDP indicates the level of industrial production and provides a measure of the economic strength of the nation; it is the only valid measure of economic growth.
B)  Inflation occurred during this period; therefore the two measures are not comparable.
C)  Population increased during this time period so real GDP per capita data reflect this change.
D)  Real GDP per capita measures changes in labour productivity that are not captured by a simple measure like real GDP.E) C) and D)
F) B) and C)

Question 18

The rate of economic growth is best defined as the:

Accepted Answer

A)  increase in investment as a percentage of GDP over time.
B)  percentage increase in nominal GDP over time.
C)  percentage increase in real GDP over time.
D)  percentage increase in the quantity and quality of capital, human, and natural resources which occurs over time.E) All of the above
F) A) and B)

Question 19

Economic growth is best defined as an increase in:

Accepted Answer

A)  either real GDP or real GDP per capita.
B)  nominal GDP.
C)  total consumption expenditures.
D)  wealth in the economy.E) All of the above
F) B) and D)

Question 20

Refer to the above table.Between years 1 and 2, real GDP grew by _______ percent in Italy:

Accepted Answer

A)  3
B)  4
C)  5
D)  10E) A) and B)
F) B) and C)

Exam 8: Part B: Economic Growth

A decline in a nation's rate of productivity growth will:

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Over a year, a nation's GDP at current prices rose by 15 percent while the price index increased from 100 to 110.GDP at constant prices rose by about:

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Real GDP was $9,950 billion in Year 1 and $10,270 billion in Year 2.What was the approximate rate of economic growth from Year 1 to Year 2?

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Real GDP was $4,719 billion in Year 1 and $4,848 billion in Year 2.In contrast, real GDP per capita in Year 1 was $19,261, but in Year 2 it was only $19,162.Why did one measure increase while the other measure decreased?

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Assume that an economy has 1500 workers, each working 2000 hours per year.If the average real output per worker-hour is $20, then total output or real GDP will be:

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Suppose the nominal GDP of an economy was $100 billion in 2016 and $260 billion in 2017.The general price index was 100 in 2016 and 180 in 2017.During 2016-2017, the economy's real GDP rose by:

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Economic growth can best be portrayed as a:

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If an economy's real GDP doubles in fourteen years, then the average annual rate of growth in real GDP is about:

Correct AnswerverifiedShow Answer

Refer to the above diagram.The most likely cause of a shift from AB to CD would be a(n) :

Correct AnswerverifiedShow Answer

A rightward shift of a nation's production possibilities curve is a necessary but not sufficient condition for economic growth.

Correct AnswerverifiedShow Answer

In Canada, the highest increase in the average annual rates of productivity growth was observed during the period of:

Correct AnswerverifiedShow Answer

Refer to the diagram below.A shift in the production possibilities curve from AB to CD is most likely due to:

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Productivity growth is a minor source of improvements in real wage rates and the standard of living.

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The historical reallocation of labour from agriculture to manufacturing in Canada has:

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Refer to the above table.Between years 1 and 2, real GDP grew by _______ percent in Italy:

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During the last decade, the innovations in computers and telecommunications, together with global competition, have resulted in:

Correct AnswerverifiedShow Answer

The achievement of full employment through time will:

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Which of the following is an effect of economic growth on the burden of scarcity?

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The rate of economic growth is best defined as the:

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Economic growth is best defined as an increase in:

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