GDP And Economic Growth 2

Question 1

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

Accepted Answer

The percentage change in real GDP over time

Answer

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

Question 2

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

Accepted Answer

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

Answer

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

Question 3

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

Accepted Answer

Productivity improvements and technological progress

Answer

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

Question 4

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

Accepted Answer

Increasing the amount of physical capital per worker

Answer

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

Question 5

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

Accepted Answer

35 years

Answer

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

GDP - Gross Domestic Product Practice Test