Economic Growth Concepts Quiz

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What is the definition of economic growth?

The decrease in the output of goods and services of an economy in a period of time

The increase in the output of goods and services of an economy in a period of time (correct)

The fluctuation of the output of goods and services of an economy in a period of time

The stabilization of the output of goods and services of an economy in a period of time

What does Nominal GDP represent?

The increase in GDP per capita

The total value of goods and services produced in an economy for a period adjusted for inflation

The number value calculated as price times quantity for the goods produced in the economy during the period (correct)

The total value of goods and services produced in an economy without adjusting for inflation

What does Real GDP represent?

The increase in GDP per capita

The number value calculated as price times quantity for the goods produced in the economy during the period

The total value of goods and services produced in an economy without adjusting for inflation

The total value of goods and services produced in an economy for a period adjusted for inflation (correct)

What are the components of Aggregate Demand (AD)?

C + I + G + (X - M) Signup and view all the answers

What is the derived demand for labor based on?

The demand of goods and services Signup and view all the answers

Explain the difference between nominal GDP and real GDP.

Nominal GDP is the value calculated as price times quantity for the goods produced in the economy during a period, while real GDP is the total value of goods and services produced in an economy for a period adjusted for inflation. Signup and view all the answers

Why is economic growth important for an economy?

Economic growth is important as it may lead to an increase in GDP per capita, potentially improving the quality of life, and it could also lead to a decrease in the unemployment rate as labor is derived from the demand of goods and services. Signup and view all the answers

What are the components of Aggregate Demand (AD)?

The components of Aggregate Demand (AD) are consumption (C), investment (I), government spending (G), and net exports (X - M). Signup and view all the answers

What is the formula for Aggregate Demand (AD)?

The formula for Aggregate Demand (AD) is AD = C + I + G + (X - M). Signup and view all the answers

Explain the concept of derived demand for labor.

Labor is a derived demand, derived from the demand of goods and services. An increase in economic growth could lead to an increase in the derived demand for labor, potentially decreasing the unemployment rate. Signup and view all the answers