Q: Suppose real G D P was $$21.4 trillion in 2021 and 21.8 $$trillion in 2022. What is the growth rate for 2022?

$$\frac{21.8 - 21.4}{21.4} \times 100 = 1.87\%$$

Question 1

Which of the following best describes the concept of long-run economic growth?

Accepted Answer

The process by which rising productivity increases the average standard of living over time.

Question 2

If real G D P per capita in 1900 was $$5,000 and in 2022 it is 45$$,000, what is the approximate fold increase in the average American's ability to buy goods and services?

Accepted Answer

Nine-fold

Question 3

Which factor is NOT directly responsible for increases in labor productivity?

Accepted Answer

Increasing the number of hours worked by each employee

Question 4

Suppose real G D P was $$21.4 trillion in 2021 and 21.8 $$trillion in 2022. What is the growth rate for 2022?

Accepted Answer

$$\frac{21.8 - 21.4}{21.4} 	imes 100 = 1.87\%$$

Question 5

Using the Rule of 70, how many years will it take for an economic variable to double if its growth rate is 5%?

Accepted Answer

$$\frac{70}{5} = 14$$ years

Question 6

Which of the following is a real-world example of how economic prosperity improves health outcomes?

Accepted Answer

Richer nations can devote more resources to improving the health of their citizens, leading to longer lifespans.

Question 7

Which policy change contributed to India's rapid economic growth after 1991?

Accepted Answer

Market-based reforms and reduction of regulations

Question 8

Potential G D P increases when:

Accepted Answer

The labor force expands, capital stock increases, or new technologies are created.

Question 9

In a closed economy, investment ($$I) $$can be expressed as:

Accepted Answer

$$I = Y - C - G$$

Question 10

Which of the following is NOT a financial intermediary?

Accepted Answer

Stock exchange

Question 11

If the government runs a budget deficit, what is the likely effect on the market for loanable funds?

Accepted Answer

The supply of loanable funds decreases, raising the equilibrium real interest rate and decreasing funds loaned to firms.

Question 12

What is 'crowding out' in macroeconomics?

Accepted Answer

A decline in private expenditure as a result of increases in government purchases.

Question 13

Which equation represents total savings in a closed economy?

Accepted Answer

$$S = (Y + TR - C - T) + (T - G)$$

Question 14

During the business cycle, what typically happens near the end of an expansion?

Accepted Answer

Interest rates and wages rise faster than other prices, and firm profits fall.

Question 15

Which of the following best describes the effect of a recession on inflation?

Accepted Answer

Inflation tends to decrease or may even turn into deflation.

Question 16

What is the typical media definition of a recession?

Accepted Answer

Two consecutive quarters of declining real G D P.

Question 17

Which of the following factors contributed to the Great Moderation in the U.S. economy?

Accepted Answer

The increasing importance of services and establishment of unemployment insurance.

Question 18

If the average annual growth rate of real G D P over three years is calculated from −2.2%, 5.8%, and 1.9%, what is the average annual growth rate?

Accepted Answer

$$\frac{-2.2 + 5.8 + 1.9}{3} = 1.83\%$$

Question 19

Which of the following is a plausible effect of technological change on the market for loanable funds?

Accepted Answer

It increases the demand for loanable funds, raising the equilibrium real interest rate and the quantity of funds loaned.

Question 20

Which group was especially affected by the Great Recession and the Covid-19 recession according to the data?

Accepted Answer

Younger millennials (aged 20–24 in 2006)

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