Solutions? 1) Economic growth is measured by A) changes in real GDP B) changes i

Question

Solutions? 1) Economic growth is measured by A) changes in real GDP B) changes in nominal GDP C) changes in the employment rate. D) All of the above are used to measure economic growth. 2) In 2014, Armenia had a real GDP of ss.21 billion and a population of 1.9s mia's economic real GDP was S5.59 billion and population was 1.97 million. growth rate from 2014 to 2015? A) 0.38 percent B) 9.0 percent C) 3.8 percent D) 7.3 percent What was Armenia's economic 3) Which of the following is used to calculate the standard of living? A) real GDP/population B) (real GDP in the current year- real GDP in previous year)real GDP in previous year) x 100 ) the one-third rule D) real GDP/aggregate hours 4) The Rule of 70 is used to A) estimate how much of an economy's growth rate is due to increases in capital per hour of labor B) estimate how long it will take the level of any variable to double C) calculate the economy's growth rate. D) calculate the standard of living. 5) Using the Rule of 70, if the country of Huttodom's current growth rate of real GDP per person was 7 percent a year, how long would it take the country's real GDP per person to double? A) 0.7 years B) 20 years C) 7 years D) 10 years 6) Which of the following predicts that there can be no sustained rise in real GDP per person above the subsistence level? A) classical growth theory B) neoclassical growth theory C) the new growth theory D) None of the above because all predict that there will be a sustained rise above the subsisteno level.

Explanation / Answer

1.A)

Economic Growth is always measured with real change in GDP Real GDP eqauls to Nominal GDP when its discounted with inflation.

2. D)

Real Economic Growth Rate is equal to growth of Real GDP

Growth of Real GDP = (5.59-5.21)/5.21*100 = 7.3 %

3. A)

Real GDP per capita is the measure of standard of living hence Real GDP/Population is the answer.

4. B)

The rule of 70 is used to calculate how long will it take to double the level of variable. Hence B is the answer.

5. C)

Number of years to doubel the level = (70/ Growth Rate of REal GDP in percent) = 70/7 = 10 years.

6.A)

CLassical theory

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