Refer to Table 25-1

question 36

Multiple Choice

Refer to Table 25-1.What is real GDP in this economy in Year 20 if the annual growth rate is 4%?
A) 2191
B) 8000
C) 20 800
D) 80 000
E) 836 683
Answer: A
Diff: 3
Topic: 25.1a.the nature of economic growth
Skill: Applied
Learning Obj.: 26-3 Explain how commercial banks create money through the process of taking deposits and making loans.
User1: Table
The diagram below shows alternate paths for two hypothetical economies,each starting with GDP of $1 billion.Assume that Area 1 is equal to Area 2. FIGURE 25-1
-Refer to Figure 25-1.Which of the following costs of economic growth are reflected in this diagram?

• A)2191
• B)8000
• C)20 800
• D)80 000
• E)836 683
• Answer: A
• Diff: 3
• Topic: 25.1a.the nature of economic growth
• Skill: Applied
• Learning Obj.: 26-3 Explain how commercial banks create money through the process of taking deposits and making loans.
• User1: Table
• The diagram below shows alternate paths for two hypothetical economies,each starting with GDP of $1 billion.Assume that Area 1 is equal to Area 2. FIGURE 25-1
• -Refer to Figure 25-1.Which of the following costs of economic growth are reflected in this diagram?
• A)the sacrifice of current consumption
• B)lower real interest rate
• C)environmental degradation
• D)resource exhaustion
• E)national saving

---

Definitions:

Last Dollar

The final unit of currency spent or invested in a particular context, emphasizing its potential impact or value.

Income Elasticity

The percentage change in the quantity of a product demanded divided by the percentage change in consumer income that caused the change in quantity demanded. It measures the responsiveness of the demand for a good to a consumer’s change in income.

Perfectly Elastic

Describes a situation where the quantity demanded or supplied reacts extremely to a small change in price, indicating infinite responsiveness.

Demand Curve

A graph representing the relationship between the price of a good or service and the quantity demanded by consumers at those prices.