The Measurement of Economic Growth Cannot Take into Account
The measurement of economic growth cannot take into account
A) the service sector of an economy.
B) productive activity in an economy.
C) cultural aspects of life in a country.
D) differences in inflation rates across countries.
Suppose two countries have identical growth rates of real GDP and the same initial value of per capita real GDP. We know, then, that
A) life expectancies are the same in both countries.
B) economic well being is the same in both countries.
C) living standards may differ in the two countries because we don't know how income is distributed in the countries.
D) living standards in the two countries are probably identical, or very close to each other.
The reason that differences in economic growth rates are important in the long run is that
A) growth compounds over time.
B) population naturally shrinks in most countries.
C) real GDP usually drops when adjusted for inflation.
D) nominal GDP typically increases faster than real GDP.
A one percentage point in the growth rate
A) does not make much difference in the long run per capita real GDP.
B) will not influence the real standard of living in a country.
C) can make a big difference in the per capita real GDP because of urban congestion.
D) can make a big difference in the per capita real GDP because of compounding.