The Following Data Show Uruguay's GDP Using Purchasing Power Parity

question 102

Multiple Choice

The following data show Uruguay's GDP using purchasing power parity in billions of dollars. Year 2000 2001 2002 2003 2004 2005 2006 2007 2008
GDP($) 26.1 25.8 23.3 24.3 27.9 30.1 33.9 37.2 40.2
Using the data, we can conclude that

• A) Uruguay's economy entered a recession in 2005.
• B) Uruguay's standard of living increased steadily between 2000 and 2008.
• C) potential GDP more than doubled between 2000 and 2008.
• D) Uruguay's economy reached a trough in 2002.

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Definitions:

Variable Costs

Expenses that change in proportion to the production or sales figures.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and labor expenses.

Total Fixed Costs

Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance premiums.

Total Costs

sum up all the costs incurred by a business in the production of goods or services, including both fixed and variable costs.