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.
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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Principles of Economics (MindTap Course List)