Between 2003 and 2007, the economy strengthened and real ______ grew. What is the missing term that best completes this statement?

• A. inflation
• B. interest rates
• C. unemployment
• D. GDP

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the context of the statement. The phrase 'Between 2003 and 2007, the economy strengthened' suggests a period of economic growth or expansion.
2. Step 2: Recall the key macroeconomic indicators that reflect economic strength. These include GDP (Gross Domestic Product), inflation, interest rates, and unemployment.
3. Step 3: Analyze each option in relation to economic strengthening: - Inflation typically rises during economic growth but is not a direct measure of growth itself. - Interest rates can vary and are influenced by monetary policy, not necessarily indicating growth. - Unemployment usually decreases when the economy strengthens, so it would not 'grow' in this context. - GDP measures the total value of goods and services produced and is the primary indicator of economic growth.
4. Step 4: Identify the missing term that fits logically in the sentence: 'real ______ grew.' Since 'real' refers to inflation-adjusted values, 'real GDP' is the standard term used to describe economic growth.
5. Step 5: Conclude that the missing term is 'GDP' because real GDP growth directly reflects the strengthening of the economy during that period.