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Principles of Macroeconomics (Mind...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781305971509
BuyFind

Principles of Macroeconomics (Mind...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781305971509

Solutions

Chapter
Section
Chapter 12, Problem 1CQQ
Textbook Problem

  1. Over the past century, real GDP per person in the United States has grown about _____ percent per year, which means it doubles about every ______ years.

a. 2, 14

b. 2, 35

c. 5, 14

d. 5, 35

Expert Solution
To determine
Real GDP growth in the U.S.

Answer to Problem 1CQQ

Option ‘b’ is the correct answer.

Explanation of Solution

Option (b)

In the United States over the past century, average income measured by real GDP per person has grown by about 2 percent per year and this rate of growth implies that average income doubles every 35 years and hence, because of this growth, most of the Americans enjoy much greater economic prosperity than before. Thus, option ‘b’ is correct.

Option (a)

The rate of growth of 2 percent in the U.S. economy over the past century implies that average income doubles every 35 years and not in every 14 years. So option ‘a’ is incorrect.

Option (c)

Over the past century, in the U.S., real GDP per person has grown by 2 percent which means it doubles every 35 years. So option ‘c’ is incorrect.

Option (d)

Over the past century, in the U.S., real GDP per person has grown by 2 percent and not by 5 percent. Hence option ‘d’ is incorrect.

Economics Concept Introduction

Concept Introduction:

GDP (Gross Domestic Product): Gross domestic product refers to the value of total goods and services produced in the given period of time within the boundaries.

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