# Gdp Capita And Measure Economic Growth Essay

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1. Economists use real GDP per capita to measure economic growth:
A) because it ignores the effect of price changes.
B) because poor nations have a large population and the population of richer nations is
declining.
C) because it is the inflation-adjusted value of a country 's production of goods and
services corrected for the change in a country 's population.
D) even though nominal GNP per capita is a far superior measure of economic growth.
Use the following to answer questions 2-5:
Scenario: Growth Rates
Suppose that real GDP per capita of the United States is \$32,000 and its growth rate is 2% per
year. Real GDP per capita of China is \$4,000, and its annual growth rate is 7%.
2. (Scenario: Growth Rates) Look at the scenario Growth Rates. How long will it take real
GDP per capita of the United States to double?
A) 35 years
B) 50 years
C) 2.25 years
D) 14 years
3. (Scenario: Growth Rates) Look at the scenario Growth Rates. How long will it take
China 's real GDP per capita to double?
A) 14 years
B) 10 years
C) 35 years
D) 50 years
4. (Scenario: Growth Rates) Look at the scenario Growth Rates. How many years will it
take for China 's real GDP per capita to be larger than real GDP per capita in the United
States?
A) 70 to 75 years
B) 40 to 45 years
C) 15 to 20 years
D) 5 to 10 years
Page 2
5. (Scenario: Growth Rates) Look at the scenario Growth Rates. According to the rule of
70, how large will China 's real GDP per capita be in 20 years?
A) \$5,600
B) \$8,000
C) \$16,000
D) \$28,000
6. Which of the following will NOT increase the productivity of labor?
A) technological improvements
B) an increase in the capital stock
C) improvements in education
D) an increase in the size of the labor force
7. If technology advances:
A) more output ...

... middle of paper ...

... growth rates.
A) lower; higher
B) lower; lower
C) higher; higher
D) higher; negative
20. Latin American growth since the 1920s has been relatively slow because of all of the
following EXCEPT:
A) a lack of savings to finance investment.
B) a lack of a solid education system.
C) a lack of political stability.
D) U.S. intervention.
21. Sub-Saharan Africa is so poor mainly because:
A) settlers from Europe own all of the land.
B) the diamond merchants took all of the money away to other countries.
C) of political instability and civil wars.
D) all of the bright people move to other countries.
22. Thomas Malthus:
A) was President Reagan 's primary economic adviser.
B) successfully predicted the nationalization of the insurance company AIG.
C) predicted that limited land supplies would prevent large increases in real incomes
per capita.
D) wrote The Limits to Growth in 1972

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