Why are politicians and economists concerned about the economic growth rate in t

Question

Why are politicians and economists concerned about the economic growth rate in the? U.S.?

A.

The level of economic growth determines the unemployment rate.

B.

Small differences in the rate of economic growth can make large differences in the standard of living over time.

C.

The level of economic growth determines where the economy is producing on the production possibilities curve.

D.

Increases in the economic growth rate must keep up with increases in per capita income so that inflation does not occur.

Explanation / Answer

Answer: Option B. Small differences in the rate of economic growth can make large differences in the standard of living overtime.

Explanation: Economic growth rate is the rate at which per capital real GDP increases/decreases. GDP per capita is considered as an instrument for measuring standard of living and economic development. Growth contributes to the long-run struggle of standard of living. Small changes in growth can cumulate to large differences in standard of living over a few years. Redistribution of income is much easier in a growing economy than a static one.

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