How is per capita GDP affected by GDP growth and population growth?
What will be an ideal response?
Per capita GDP is the dollar value of GDP divided by total population. If GDP increases and population is constant, then per capita GDP will grow. If population and GDP grow at the same time, then GDP must grow at a more rapid rate than population for per capita GDP to increase. Even if GDP grows, if population grows at a more rapid rate, then per capita GDP will decline.
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Answer the next question using the following budget information for a hypothetical economy. All data are in billions of dollars. Government SpendingTax RevenuesGDPYear 1$800$825$4,000Year 28508504,200Year 39008754,350Year 49509004,500Year 51,0009254,600The budget deficit was $75 billion in
A. Year 2. B. Year 3. C. Year 4. D. Year 5.
In the figure above, an
A) efficient output results, but the firm incurs a loss per household which must be subsidized in some way. B) inefficient output results, though the firm covers its costs. C) efficient output results, though marginal costs exceed average total costs. D) inefficient output results because the firm cannot cover its costs. E) efficient output results because consumer surplus is maximized.
By providing and communicating information, the financial system
A) reduces the difference between the return on three-month U.S. Treasury bills and the return on thirty-year U.S. Treasury bonds. B) relieves individual savers from the necessity of searching out individual borrowers. C) eliminates the risk in investing in the stock market. D) guarantees investors a reasonable return on their money.
The age-earning cycle predicts that a typical person will
A) be earning $50,000 in the year 2010. B) be earning the lowest income right before retirement. C) be earning the highest income right before retirement. D) be earning the highest income at about the age 45-50.