Real gross domestic product is best defined as:
the market value of all final goods and services produced in an economy stated in the prices of a given year.
Per capita real output is best defined as the market value of all final goods and services produced in an economy in:
the prices of a given (base) year divided by the population
If a country’s real GDP and population are, respectively, $500 billion and 200 million, then its per capita real output is:
To compute per capita real GDP, divide a country’s real GDP ($500 billion) by its population (200 million.)
Per capita real output would be certain to increase if
Per capita real output is real GDP divided by population. If the numerator increases and the denominator decreases, the fraction must increase
Between 1990 and 2001, both Finland and France had average annual population growth rates of 0.4 percent. The growth rate of real GDP in the two countries in the same time period, however, was 3 percent in Finland and 1.8 percent in France. From this we can conclude that:
Per capita GDP equals the ratio of a country’s real GDP to its population. If both countries’ populations are growing at the same rate, then the country with the faster growth rate in real GDP will see its per capita GDP increase more rapidly.
The trend (secular) growth rate is the:
average rate of growth in real output over many years.
U.S. economic growth in output since about 1890 has averaged
2.5 to 3.5 percent
The region of the world that has achieved the lowest secular trend per capita growth rate since 1820 is:
The region of the world or country that has achieved the highest secular trend per capita growth rate since 1950 is:
Fluctuations around the long-term growth rate are called:
The business cycle is:
the term used to describe fluctuations in output around its long-term trend.
Business cycles are generally considered in:
Since business cycles are a short-run phenomenon, they are generally considered in the short-run framework.
Issues of growth are generally considered in:
Since growth is a long-run phenomenon, it is generally considered in the long-run framework.
The short-run business cycle framework focuses primarily on factors:
Demand is the dominant factor in the short run.
The long-run growth framework focuses primarily on factors:
Supply is the dominant factor in the long run.
Policies that affect aggregate expenditures are primarily relevant to:
A. Policies that affect aggregate expenditure also affect the demand for output and are thus most relevant to the short-run business cycle framework.
Policies that affect work, capital accumulation, and technological change are primarily relevant to:
Policies that affect work, capital accumulation, and technological change also affect the supply of output and are thus most relevant to the long-run growth framework.
Which of the following statements best characterizes the Classical view of business cycles?
Fluctuations in business activity are to be expected and should be accepted just as changes in he seasons are accepted.
Which of the following statements best characterizes the Keynesian view of business cycles?
Expansions and contractions of the business cycle are symptoms of underlying
problems and should be dealt with.
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