Economics Part 2

The economy had a real gdp per capita equal to 40,000 in year 1 and equal to 42,000 in year 2.  What is the economic growth rate? 

• 2,000

• 2%

• 5%

• 4.7%

Inflation tends to ________ during the expansion phase of the business cycle and ________ during the recession phase of the business cycle.

• decrease; decrease further

• increase; increase further

• increase; decrease

• decrease; increase

The best measure of a country's standard of living is

• total nominal GDP

• real GDP per unit of capital

• real GDP per labor hour

• real GDP per capita

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

• slow the growth of the standard of living

• reduce the inflation rate

• make industry more competitive in world markets

• increase education and training

Which of the following is an example of a measure of labor productivity?

• Wages increase by 3.5 percent per year for 5 years

• The growth rate of per capita real GDP is 3.5 percent per year

• Autos get 30 gallons to the mile

• Farm workers produce 30 bushels of wheat per worker per day

In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?

• Trough

• Recession

• Peak

• Expansion

When the contraction phase ends the __________ phase begins

• contactionary

• trough

• expansionary

• peak

If a country's real GDP is rising by 2% per year while its population is rising at 7% per year, which of the following is true?

• Growth in nominal GDP is less than the growth in the population

• The country's standard of living is falling

• Growth in nominal GDP outweighs growth in the population

• The country's standard of living is rising

Lack of investment in strong education and health care systems

• causes a deterioration in human capital and a decline in labor productivity

• increases human capital and cause a decline in labor productivity

• causes a decline in physical capital and a decline in labor productivity

• causes a deterioration in human capital and an increase in physical capital

Suppose an economy is able to double its real GDP per-capita in the span of 25 years, such that its potential output would equal 300 billion a year.   The growth rate necessary to achieve this goal was

• 4.29%

• 3.2%

• 2.33%

• 2.8%