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Annual Growth Rates of Real GDP Per Capita
(in percents)
Ending
Year
1929
1933
-8.2
1939
0.2
1940
0.9
1945
3.7
10.3
1950
2.4
4.1
-1.8
1955
2.4
3.6
0.4
2.7
1960
2.2
2.9
0.6
1.7
0.8
1965
2.4
3.0
1.3
2.3
2.1
3.5
1970
2.3
2.9
1.5
2.3
2.2
2.9
2.3
1975
2.3
2.7
1.5
2.2
2.0
2.4
2.0
1.6
1980
2.3
2.7
1.7
2.2
2.1
2.5
2.2
2.1
2.6
1985
2.3
2.6
1.7
2.2
2.2
2.4
2.2
2.1
2.4
2.2
1990
2.3
2.6
1.8
2.2
2.2
2.4
2.2
2.2
2.4
2.2
2.3
1995
2.2
2.5
1.7
2.1
2.1
2.3
2.1
2.0
2.1
1.9
1.8
1.3
2001
2.3
2.5
1.9
2.2
2.2
2.3
2.2
2.2
2.3
2.2
2.2
2.1
2.8
1929
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
Starting Year
Source: Economic Report of the President, various years.
This table keeps changes in real GDP from being overstated by adjusting for
Select one:
a. productivity.
b. inflation.
c. standard of living.
d. population growth.
Question 2
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Per Capita GDP
$33,609
$33,586
$27,126
$23,311
$23,230
Economists use numbers such as those in the table as a measure of
Select one:
a. net exports.
b. total dollar value of all final goods and services.
c. national income.
d. standard of living.
Question 3
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Per Capita GDP
$33,609
$33,586
$27,126
$23,311
$23,230
The numbers in this table were calculated by
Select one:
a. multiplying GDP by total population.
b. dividing GDP by total population.
c. adding the dollar value of all final goods and services produced in the nation.
d. subtracting net exports from GDP.
Question 4
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Source: “Leading Indicators Decline,” USAToday.com, October 22, 2001.
The passage discusses a business fluctuation influenced by
Select one:
a. external shock.
b. monetary factors.
c. innovation.
d. capital expenditures.
Question 5
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Question text
Source: The New York Times, July 14, 1999.
The passage describes rising inflation as a possible result of
Select one:
a. a booming economy.
b. rising unemployment.
c. tax cuts.
d. a prolonged period of stable prices.
Annual Growth Rates of Real GDP Per Capita
(in percents)
Ending
Year
1929
1933
-8.2
1939
0.2
1940
0.9
1945
3.7
10.3
1950
2.4
4.1
-1.8
1955
2.4
3.6
0.4
2.7
1960
2.2
2.9
0.6
1.7
0.8
1965
2.4
3.0
1.3
2.3
2.1
3.5
1970
2.3
2.9
1.5
2.3
2.2
2.9
2.3
1975
2.3
2.7
1.5
2.2
2.0
2.4
2.0
1.6
1980
2.3
2.7
1.7
2.2
2.1
2.5
2.2
2.1
2.6
1985
2.3
2.6
1.7
2.2
2.2
2.4
2.2
2.1
2.4
2.2
1990
2.3
2.6
1.8
2.2
2.2
2.4
2.2
2.2
2.4
2.2
2.3
1995
2.2
2.5
1.7
2.1
2.1
2.3
2.1
2.0
2.1
1.9
1.8
1.3
2001
2.3
2.5
1.9
2.2
2.2
2.3
2.2
2.2
2.3
2.2
2.2
2.1
2.8
1929
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
Starting Year
Solution
Hi,
The correct answers are as follows:
1. Inflation
Eplanation: Real Gross Domestic Product (real GDP) is a macroeconomic measure of the value
of economic output adjusted for price changes (i.e., inflation or deflation)
---------
2. standard of living
Eplanation: Per capita income is a strong indicator of the standard of living. High per capita
income often translates to high standard of living and vice versa.
---------
3. dividing GDP by total population
Eplanation: Per capita income is the average annual income earned by each individual in a
country. The formula for calculating per capita income is dividing GDP by total population
-----------
4. external shock
Eplanation: Here the fluctuations were caused by an eternal event over which the country has no
control. Hence it was due to an eternal shock
-----------
5. a prolonged period of stable prices.
Eplanation: The problem here is a long term of stable prices. The economy has boomed and
people are earning more. But the prices are stable, which will promt people to buy more goods. It
may lead to an inflationary situation

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Annual Growth Rates of Real GDP Per Capita(in percents)Ending .pdf