Understanding GDP and Economic Growth

The video tutorial explains the concept of GDP, differentiating between nominal and real GDP. It highlights the importance of real GDP in measuring economic growth by controlling for inflation. The tutorial uses the St. Louis Federal Reserve Economic Database (FRED) to analyze GDP data, comparing economic growth from 1950 to 2015. It also discusses real GDP per capita as a measure of standard of living and its relation to population growth. The video concludes by examining GDP's role in identifying recessions and its impact on unemployment, setting the stage for further exploration in the next video.

What does GDP measure in an economy?

• The total value of all finished goods and services

• The total amount of money in circulation

• The total population

• The total number of businesses

Which of the following can cause an increase in Nominal GDP without an actual increase in production?

• Inflation

• Improved education

• Technological advancements

• Increase in labor force

What does Real GDP control for to provide a more accurate measure of economic growth?

• Population growth

• Government policies

• Technological changes

• Inflation

What tool is referred to as every economist's best friend for analyzing GDP data?

• St. Louis Federal Reserve Economic Database (FRED)

• Yahoo Finance

• Excel

• Google Finance

How much did the US economy grow in terms of Real GDP from 1950 to 2015?

• 4 times

• 2 times

• 55 times

• 8 times

What does Real GDP per capita measure?

• Total GDP divided by the number of goods produced

• Total GDP divided by the population

• Total GDP divided by the number of businesses

• Total GDP divided by the number of services provided

By how much did the standard of living, as measured by Real GDP per capita, increase from 1950 to 2015?

• 2 times

• 55 times

• 4 times

• 8 times

What can be inferred if Real GDP increases by eight times and Real GDP per capita increases by four times?

• The population remained the same

• The population doubled

• The population tripled

• The population decreased

What typically happens to Real GDP per capita during a recession?

• It increases

• It remains the same

• It declines

• It fluctuates randomly

What is often accompanied by a decline in Real GDP during a recession?

• Increase in inflation

• Decrease in inflation

• Increase in unemployment

• Decrease in unemployment