Suppose That in 2011 Real GDP Grew in Estonia by 3

question 94

Multiple Choice

Suppose that in 2011 real GDP grew in Estonia by 3% and that the population increased by 5%.Therefore in 2011, Estonia experienced

• A)economic growth, but not an increase in living standards.
• B)economic growth and an increase in living standards.
• C)no economic growth, but an increase in living standards.
• D)no economic growth and no increase in living standards.
• E)economic collapse and an increase in living standards.

---

Definitions:

Homothetic Preferences

Preferences where if a consumer prefers a bundle of goods A to B, they will also prefer a proportional scaling of A to the same proportional scaling of B, indicating consistent patterns of consumption regardless of income level.

Income

Earnings accumulated, often on a consistent schedule, from employment or investment gains.

Books

Physical or digital publications consisting of written, printed, or illustrated work.

Fixed Proportions

A production condition where inputs must be used in constant ratios to each other, without substitution possibilities, to produce a particular output.