Macro Economics - Economic Growth

Using a production possibilities curve, economic growth resulting from the use of previously idle resources is shown as:

a movement toward the curve.

While some countries have experienced improvements in standards of living, there are a few countries that are subject to absolute poverty. (True or False)

True

When we measure economic growth, we are interested in how ______ the economy is growing.

fast, much, quickly, or rapidly

In Great Britain by 1750, whole sections of the English peasantry were enjoying levels of prosperity and wealth that had previously been reserved for elites such as kings and clergy. (True or False)

True

An increase in real GDP or real GDP per capita is called:

economic growth.

Economic growth results from choices we make as a society. (True or False)

True

The points on the production possibilities frontier show how we are allocating our _____ to the production of two different goods or services.

resources or resource

Suppose the real GDP per capita was $30,000 billion in Year 1. In Year 2, the real GDP per capita rose to $34,500 billion. The growth rate of real GDP per capita was _____ %

((34500 - 30000)/30000)*100

If idle resources are put to use and more output is produced in an economy, there will be ------ ------ .

economic growth

Knowing how ----- an economy is growing can give us an idea of how big it will be in the future.

fast, much, quickly, or rapidly

----- growth is calculated using real GDP or real GDP per capita.

economic

When a country produces low amounts of capital, it can still grow. (True or False)

True

Suppose that in year 1, real GDP per capita was $28,000 billion and in year 2, real GDP per capita rose to $32,200 billion. The growth rate of real GDP per capita was %

((32200-28000)/28000)*100 = 15%

The growth rate of real GDP is calculated as:

[(New GDP - Old GDP)/Old GDP] * 100.

Using a production possibilities curve, economic growth resulting from additional resources is shown as:

an outward shift of the curve.

Knowing how fast an economy is growing relative to population tells us:

whether standards of living are rising or falling on average.

The rule of ----- is a quick and easy way to estimate how long it will take for a number or amount to double in size given a constant rate of growth.

72

Economic growth is defined as:

an increase in real GDP or real GDP per capita.

Suppose that real GDP per capita equals $25,000 and that the growth rate of real GDP per capita is 6 percent per year. It will take ----- years for real GDP per capita to double to $50,000.

12 or twelve --- (72/6)

Suppose the real GDP of a country was $50 billion in Year 1. In year 2, the real GDP rose to $54 billion. The growth rate of real GDP was ----- %. (Enter a number in the blank.)

((54-50)/50)*100 = 8

Since 1978, ----- has been able to sustain average growth rates of roughly 9 percent. (Name the country.)

China

Which of the following is true of the formula [(New Real GDP −- Old Real GDP)/Old Real GDP] ×× 100%?

It gives us the economic growth rate.

The error of the rule of 72 approximation increases with ----- growth rates.

larger, higher, bigger, greater, increasing, increased, high, faster, or large

Suppose that real GDP per capita equals $25,000 and that the growth rate of real GDP per capita is 4 percent per year. According to the rule of 72, it will take ----- years for real GDP per capita to double to $50,000.

(72/4) = 18 years

The notion that developing countries can catch up or converge with developed countries is one of the key insights of a branch of economics called ----- economics.

development

The rule of 72:

does not provide answers that are 100% accurate related to the years needed to double

When it comes to growth rates, small changes can have big impacts and steady growth over time can change the world. (True or False)

True

The rule of ----- is a quick and easy way to estimate how long it will take for a number or amount to double in size given a constant rate of growth.

72 or seventy two