Economic Growth practice questions

Growth is advantageous to a nation because it

lessens the burden of scarcity

Economic growth can be portrayed as a(n)

outward shift of the production possibilities curve

A nation's real GDP was $250 billion in 2013 and $265 billion in 2014. Its population was 122 million in 2013 and 125 million in 2014. What is the growth rate of real GDP per capita in 2014?

3.46%

A nation's real GDP was $250 billion in 2013 and $265 billion in 2014. Its population was 120 million in 2013 and 125 million in 2014. What is its real GDP growth rate in 2014?

6.00%

The selection of which point on the production possibilities curve is most likely to result in the largest increase in economic growth over time?

A (The point on the production possibilities curve that is most likely to result in the largest increase in economic growth over time is the one that maximizes the use of resources and allows for the production of more goods and services.

Assume a nation's current production possibilities are represented by the curve AB in the above diagram. Economic growth would best be indicated by a

shift in the curve from AB to CD

Suppose there are two economies, Alpha and Beta, that have the same production possibilities curves. If Beta devotes more resources to produce capital goods than consumer goods as compared to Alpha, then in the future

Beta will experience greater economic growth than Alpha (Imagine two countries, Alpha and Beta, with the same potential for growth. If Beta invests more in building factories and infrastructure (capital goods) instead of focusing on immediate consumption (consumer goods) like Alpha, Beta will have a stronger economy in the future.)

Real GDP per capita is found by

dividing real GDP by population.

Which of the following is a measure of economic growth that is most useful for comparing living standards?

increases in real GDP per capita

Economic growth can best be portrayed as a

rightward shift of the production possibilities curve

Economic historians identify which invention as a major factor that started the Industrial Revolution in Britain?

steam engine

Before the Industrial Revolution, living standards in the world

were relatively stagnant for long periods of time.