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And Economic Growth Flashcards

7 cards from real GDP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 And Economic Growth flashcards as text

  1. Which of the following best measures the rate of economic growth?

    Answer: The percentage change in real GDP over time

    Economic growth is measured as the percentage change in real GDP from one period to the next.

  2. What is the 'Rule of 70' used for in economics?

    Answer: Estimating how long it takes GDP to double at a given growth rate

    The Rule of 70 divides 70 by the annual growth rate to estimate the number of years it takes for GDP to double.

  3. Which factor is considered a PRIMARY driver of long-run economic growth?

    Answer: Productivity improvements and technological progress

    Long-run growth is driven by improvements in productivity and technology, which increase output per worker.

  4. In the context of GDP and economic growth, what does 'capital deepening' mean?

    Answer: Increasing the amount of physical capital per worker

    Capital deepening refers to an increase in the stock of physical capital per worker, which raises labor productivity.

  5. A country grows at 2% per year. Approximately how many years will it take for its GDP to double?

    Answer: 35 years

    Using the Rule of 70: 70 ÷ 2 = 35 years for GDP to double.

  6. Which scenario represents a supply-side source of economic growth?

    Answer: Improvements in worker education and skills

    Supply-side growth sources include improvements in human capital such as education and worker skills, which expand productive capacity.

  7. What is 'potential GDP'?

    Answer: The level of output when all resources are fully and efficiently employed

    Potential GDP is the level of real output the economy can sustain when all resources, including labor, are fully employed.