Question 1: Country X produces only one good. It produced 12,500 units of a good during a particular year.
If the price of the good during that year was $100 and the price of the good during the base year was $95, the real GDP of the country is?
Question 2: Your mortgage compounds interest annually at an interest rate of 5.1%. You begin repaying the capital borrowed after year 5. If your loan was for $500,000, how much interest did you pay after 5 years (assume that you made no capital payments)?
Question 3: Which of the following statements is NOT true?
A- Sustained economic growth is a modern phenomenon
B- The average GDP per capita in the world before 1800 was around $400 (in 1996 Geary-Khamis dollars)
C- Long-term economic growth deals with recessions and expansions.
D- Institutions are a proximate cause of economic growth.
Question 4: Suppose that last year, the GDP of this economy was $215 million. We are interested in how much of the increase since last year was due to actual increases in production rather than just increases in prices. Which of the following measures would not be influenced by an increase in prices? Choose all that apply.
A- Nominal GDP
B- Real GDP
C- Nominal GDP per capita
D- Real GDP per capita
Question 5: The average U.S. growth rate since 2008 has been 1.5% per year. Using the rule of 72, how long will it take for the size of the U.S. economy to quadruple at this growth rate?
Remember to answer up to two decimal places.