Question

In 1990 Country X had a GDP of $100 million (measured in U.S. dollars) and had a GDP of $110 million in 2000 (measured in U.S. dollars), what was the level of economic growth did the country make between 1990 and 2000? A. 10 % B. 40 % C. 10.77 % D. 7.7 %

The situation where the buying power of money in terms of goods and services decreases is called: A. deflation. B. inflation. C. stationary pricing. D. hyperinflation.

What distinguishes the real value of a statistic from the nominal value of a statistic? A. timing of announcement B. adjusting for inflation C. adjusting for GDP deflator D. real interest rate

Answer 1

1.

To calculate the level of economic growth, we need to use

Growth Rate = [(GDP of 2000 - GDP of 1990) / (GDP of 1990)] * 100

Growth Rate = [($110 - $100) / ($100)] * 100 = 10%.

So, the level of growth rate between 1990 and 2000 is

A. 10%.

2.

The situation where the buying power of money in terms of goods and services decreases is called:

B. Inflation.

This is because inflation means the real value of money falls. That means we can buy less amount of goods and services now than before.

3.

What distinguishes the real value of a statistic from the nominal value of a statistic:

B. Adjusting for inflation.

This is because, Real value = Nominal Value - Inflation.