Question 1

Annual real per capita gross domestic product (GDP)in Western Europe was roughly $31,000 in 2000.If it grew by 4 percent the following year,by 2001 the annual real per capita GDP would be

Accepted Answer

To find the GDP in 2001, calculate 4% of $31,000 and add it to the original amount: $31,000 * 0.04 = $1,240. Then, $31,000 + $1,240 = $32,240.

Question 2

In 2010,per capita real gross domestic product (GDP)in the United States was roughly $46,000.In 2011,per capita real GDP in the United States was roughly $48,400.Therefore,between 2010 and 2011,the rate of economic growth in the United States was

Accepted Answer

The answer of In 2010,per capita real gross domestic product...

Question 3

If your income increases at a rate of 2 percent per year,how long will it take to double your income?

Accepted Answer

The formula for finding the time it takes for an amount to double at a constant growth rate is

t = ln(2) / ln(1 + r)

where t is the time in years, r is the annual growth rate as a decimal, ln is the natural logarithm, and ln(2) is the natural logarithm of 2.

In this case, r = 0.02 (2 percent as a decimal), so

t = ln(2) / ln(1 + 0.02)

t = ln(2) / ln(1.02)

Using a calculator, we find that t ≈ 35. Therefore, it will take about 35 years for the income to double.

Question 4

Annual real per capita gross domestic product (GDP)in China was roughly $5,200 in 2000.If it grew by 10 percent the following year,by 2001 the annual real per capita GDP would be

Accepted Answer

A 10 percent increase on $5,200 is $520, so the new GDP would be $5,200 + $520 = $5,720.

Question 5

From 2009 to 2010,nominal gross domestic product (GDP)in the United States grew by 3.8 percent.Given that the population grew by 1 percent and per capita real GDP grew by 1.8 percent,we know that prices increased by

Accepted Answer

The answer of From 2009 to 2010,nominal gross domestic product...

Question 6

If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP),what would you be missing?

Accepted Answer

An increase in nominal GDP does not necessarily indicate an increase in standards of living, as changes in prices and population can affect the measurement. Additionally, nominal GDP includes all economic activity, including sales of used and illegal goods, which may not contribute to an increase in standards of living. Therefore, looking only at changes in nominal GDP may miss other important factors that contribute to standards of living.

Question 7

When computing economic growth,changes in nominal gross domestic product (GDP)must be adjusted to reflect population growth because

Accepted Answer

Nominal GDP does not take into account changes in population, meaning that an increase in nominal GDP could simply be due to an increase in population rather than an increase in actual economic output. Adjusting for population growth gives a more accurate picture of changes in standards of living.

Question 8

In the Republic of Yemen,per capita real gross domestic product (GDP)in 2004 was $2,109.27.By 2005,it had increased to $2,203.05.At what rate did Yemen's economy grow in that time?

Accepted Answer

The answer of In the Republic of Yemen,per capita real...

Question 9

From 2009 to 2010,nominal gross domestic product (GDP)in the United States increased by 3.8 percent.Does this mean that the U.S.economy actually grew by 3.8 percent during that time period?

Accepted Answer

Nominal GDP measures the total market value of goods and services produced, not accounting for inflation or population growth.

Question 10

James has worked for the same company his entire life.His current income is $100,000 per year.When he was originally hired,he made $50,000 per year.The company has given James a consistent raise of 2 percent every year.How long has James been with the company?

Accepted Answer

Let's say James has been working for x years.

So, his initial salary = $50,000
Current salary = $100,000

According to the question, the company gave James a consistent raise of 2 percent every year.

Using compound interest formula, we can say:

100,000 = 50,000(1+0.02)^x

Simplifying the equation, we get:

2 = 1.02^x

Taking log on both sides:

xlog(1.02) = log(2)

x = log(2)/log(1.02)

x ≈ 34.28

So, James has been working for approximately 35 years. Therefore, the answer is C) 35 years.

Question 11

In 2007,per capita real gross domestic product (GDP)in Brazil was $9,893.92.By 2008,it had increased to $10,525.58.At what rate did Brazil's economy grow in that time?

Accepted Answer

To calculate the growth rate of Brazil's economy, we need to use the following formula:

Growth rate = (Final value - Initial value) / Initial value x 100%

Plugging in the given values, we get:

Growth rate = ($10,525.58 - $9,893.92) / $9,893.92 x 100%
Growth rate = $631.66 / $9,893.92 x 100%
Growth rate = 0.0638 x 100%
Growth rate = 6.38%

Therefore, Brazil's economy grew at a rate of 6.4% (approximately) in that time. The closest answer option is C (6.4%), which is the correct answer.

Question 12

When computing economic growth,changes in nominal gross domestic product (GDP)must be adjusted to reflect changes in the price level because

Accepted Answer

An increase in prices will increase nominal GDP without any actual economic growth, so adjustments are needed to reflect real growth.

Question 13

In 2011,per capita real gross domestic product (GDP)in Mexico was roughly $10,100.If Mexico experienced economic growth of 4.8 percent in 2012,per capita real GDP would increase to

Accepted Answer

To calculate the new per capita real GDP, we need to multiply the old per capita real GDP by (1+ growth rate). So, $10,100 x 1.048 = $10,585. Therefore, the answer is A.

Question 14

Annual real per capita gross domestic product (GDP)in India was roughly $2,900 in 2000.If it grew by 8 percent the following year,by 2001 the annual real per capita GDP would be

Accepted Answer

To find the new annual real per capita GDP in 2001, we need to multiply the initial value ($2,900) by (1 + growth rate as a decimal). 
So,

New annual real per capita GDP = $2,900 × (1 + 0.08) = $2,900 × 1.08 = $3,132

Therefore, the answer is choice (A).

Question 15

In 2005,per capita real gross domestic product (GDP)in Angola was $3,328.10.By 2006,it had increased to $4,034.31.At what rate did Angola's economy grow in that time?

Accepted Answer

The growth rate is calculated as ((4034.31 - 3328.10) / 3328.10) * 100 = 21.2 percent.

Question 16

From 2009 to 2010,per capita real gross domestic product (GDP)in the United States grew by 1.8 percent.Given that prices increased by 1 percent and the population grew by 1 percent,we know that nominal GDP grew by

Accepted Answer

Nominal GDP growth is the sum of real GDP growth, inflation rate, and population growth: 1.8% + 1% + 1% = 3.8%.

Question 17

In 1998,per capita real gross domestic product (GDP)in Thailand was $4,444.19.By 1999,it had increased to $4,695.22.At what rate did Thailand's economy grow in that time?

Accepted Answer

The answer of In 1998,per capita real gross domestic product...

Question 18

In 2010,real gross domestic product (GDP)in the United States was roughly $14.6 trillion.In 2011,real GDP in the United States was roughly $15.1 trillion.Therefore,between 2010 and 2011,real GDP grew by

Accepted Answer

The growth rate is calculated as ((15.1 - 14.6) / 14.6) * 100 = 3.4 percent.

Question 19

In 2009,per capita real gross domestic product (GDP)in Croatia was $10,059.68.By 2010,it had increased to $10,257.71.At what rate did Croatia's economy grow in that time?

Accepted Answer

The answer of In 2009,per capita real gross domestic product...

Question 20

In 2010,per capita real gross domestic product (GDP)in Germany was $40,197.67.By 2011,it had increased to $43,741.55.At what rate did Germany's economy grow in that time?

Accepted Answer

The answer of In 2010,per capita real gross domestic product...

Quiz 24: Economic Growth and the Wealth of Nations

Annual real per capita gross domestic product (GDP) in Western Europe was roughly $31,000 in 2000.If it grew by 4 percent the following year,by 2001 the annual real per capita GDP would be

In 2010,per capita real gross domestic product (GDP) in the United States was roughly $46,000.In 2011,per capita real GDP in the United States was roughly $48,400.Therefore,between 2010 and 2011,the rate of economic growth in the United States was

If your income increases at a rate of 2 percent per year,how long will it take to double your income?

Annual real per capita gross domestic product (GDP) in China was roughly $5,200 in 2000.If it grew by 10 percent the following year,by 2001 the annual real per capita GDP would be

From 2009 to 2010,nominal gross domestic product (GDP) in the United States grew by 3.8 percent.Given that the population grew by 1 percent and per capita real GDP grew by 1.8 percent,we know that prices increased by

If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) ,what would you be missing?

When computing economic growth,changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because

In the Republic of Yemen,per capita real gross domestic product (GDP) in 2004 was $2,109.27.By 2005,it had increased to $2,203.05.At what rate did Yemen's economy grow in that time?

From 2009 to 2010,nominal gross domestic product (GDP) in the United States increased by 3.8 percent.Does this mean that the U.S.economy actually grew by 3.8 percent during that time period?

James has worked for the same company his entire life.His current income is $100,000 per year.When he was originally hired,he made $50,000 per year.The company has given James a consistent raise of 2 percent every year.How long has James been with the company?

In 2007,per capita real gross domestic product (GDP) in Brazil was $9,893.92.By 2008,it had increased to $10,525.58.At what rate did Brazil's economy grow in that time?

When computing economic growth,changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because

In 2011,per capita real gross domestic product (GDP) in Mexico was roughly $10,100.If Mexico experienced economic growth of 4.8 percent in 2012,per capita real GDP would increase to

Annual real per capita gross domestic product (GDP) in India was roughly $2,900 in 2000.If it grew by 8 percent the following year,by 2001 the annual real per capita GDP would be

In 2005,per capita real gross domestic product (GDP) in Angola was $3,328.10.By 2006,it had increased to $4,034.31.At what rate did Angola's economy grow in that time?

From 2009 to 2010,per capita real gross domestic product (GDP) in the United States grew by 1.8 percent.Given that prices increased by 1 percent and the population grew by 1 percent,we know that nominal GDP grew by

In 1998,per capita real gross domestic product (GDP) in Thailand was $4,444.19.By 1999,it had increased to $4,695.22.At what rate did Thailand's economy grow in that time?

In 2010,real gross domestic product (GDP) in the United States was roughly $14.6 trillion.In 2011,real GDP in the United States was roughly $15.1 trillion.Therefore,between 2010 and 2011,real GDP grew by

In 2009,per capita real gross domestic product (GDP) in Croatia was $10,059.68.By 2010,it had increased to $10,257.71.At what rate did Croatia's economy grow in that time?

In 2010,per capita real gross domestic product (GDP) in Germany was $40,197.67.By 2011,it had increased to $43,741.55.At what rate did Germany's economy grow in that time?