1/All else constant, if a nation\'s potential output doubles in 36 years, its av

Question

1/All else constant, if a nation's potential output doubles in 36 years, its average annual growth rate is
A/approximately 1%
B/approximately 2%
C/approximately 3%
D/approximately 4%

2/Economists do not use actual values of real GDP to measure economic growth because
A/real GDP holds price level constant, but in reality price level changes from year to year.
B/changes in real GDP could be due to fluctuations in the level of economic activity.
C/economic growth encompasses more than just growth in output.
D/changes in real GDP do not provide any information about income distribution.

3/The real wage is the ratio of the price level to the nominal wage.
A/True
B/False

4/Holding all else constant, a country's standard of living will decline if its
A/nominal GDP grows at a faster rate than real GDP.
B/nominal GDP grows at a slower rate than real GDP.
C/the rate of population growth exceeds the rate of growth of real GDP.
D/the rate of population growth is less than the rate of growth of real GDP.

Explanation / Answer

C/approximately 3% B/changes in real GDP could be due to fluctuations in the level of economic activity B/False . B/nominal GDP grows at a slower rate than real GDP.

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