Question

All of the following contribute to economic growth except: increases in technology. increases in research and development. increases in labor productivity. increases in the average level of prices. c. If growth in real GDP exceeds population growth: material living standards would likely decline. material living standards would likely increase. per-capita GDP would decrease. productivity would decrease. If nominal GDP rose from $6,500 billion in the base year to $7,030.4 billion in the current year and the current year GDP Deflator is 104, then the economy's growth approximately 2.3 percent. 4 percent. 6.4 percent. approximately 10.6 percent. 10. If the current GDP deflator is 108.6 and nominal GDP is $7,400 billion, then real GDP base-year dollars is approximately: $6,814 billion $7,507 billion. $8,036 billion. d. $8,281 billion. c.

Answer 1

7) Economic growth happens when real GDP increases. Average level of price increase will not have any effect on real GDP. Increase in technology, research and development, and labor productivity will lead to higher output and GDP. Option d) is correct.

8) Real GDP divided by population gives the per capita GDP. If real GDP grows more than population, per capita GDP would increase. Thus, there will be more income and the material living standards are likely to increase. Option b) is correct.

9) GDP deflator = Nominal GDP/Real GDP *100

Now, current year real GDP = 7030.4/104*100 = 6760

Growth rate = (6760/6500-1) * 100 = 4%

Option b) is correct.

10) Real GDP = 7400/108.6*100 = 6814

Option a) is correct.