Chapter 5 (5.1)

Question 1

If real GDP is growing at a 2 percent annually and the annual growth rate of population is 2.5 percent,

None of the above are correct.
real GDP per capita must be increasing.
real GDP must be growing more slowly than real GDP per capita.
real GDP per capita must be negative.
real GDP must be growing faster than real GDP per capita.

Answer 1

real GDP must be growing faster than real GDP per capita.

Question 2

If real GDP and population grow at the same rate, the real GDP per capita will decrease.

true
false

Answer 2

false

Question 3

As a rule of thumb, a recession is

a fall in real GDP lasting at least one year.

said to occur whenever real GDP falls below the long-term trend for at least one month.

a fall in real GDP lasting at least one month.

said to occur whenever real GDP falls below the long-term trend.

a fall in real GDP lasting at least six months.

Answer 3

a fall in real GDP lasting at least six months.

Question 4

The period between recessions is known as a(n):

trough
peak
moderation
regression
expansion

Answer 4

expansion

Question 5

The long-run upward trend in real GDP is called:

the business cycle
economic growth
inflation
recession
economic fluctuations

Answer 5

economic growth