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# GDP growth rate

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CH 8/ Q2. Suppose an economy's real GDP is \$30,000
in year 1 and \$31,200 in year 2. What is the growth rate of
its real GDP? Assume that population is 100 in year 1 and
102 in year 2. What is the growth rate of GDP per capita?

CH 8/Q11. If the CPI was 110 last year and is 121 this
year, what is this year's rate of inflation? What is the "rule
of 70"? How long would it take for the price level to double
if inflation persisted at (a) 2, (b) 5, and (c) 10 percent per
year?

CH20/ Q2. Graph the accompanying demand data, and
then use the midpoint formula for Ed to determine price
elasticity of demand for each of the four possible \$1 price
changes. What can you conclude about the relationship between
the slope of a curve and its elasticity? Explain in a
nontechnical way why demand is elastic in the northwest
segment of the demand curve and inelastic in the southeast
segment.

Product Quantity
Price Demanded
\$5 1
4 2
3 3
2 4
1 5

CH22/ Q7. A firm has fixed costs of \$60 and variable
costs as indicated in the table on the following page.
Complete the table and check your calculations by referring
to question 4 at the end of Chapter 23.

a. Graph total fixed cost, total variable cost, and total cost.
Explain how the law of diminishing returns influences
the shapes of the variable-cost and total-cost curves.
b. Graph AFC, AVC, ATC, and MC. Explain the derivation
and shape of each of these four curves and their
relationships to one another. Specifically, explain in
nontechnical terms why the MC curve intersects both
the AVC and the ATC curves at their minimum points.
c. Explain how the location of each curve graphed in
question 7b would be altered if (1) total fixed cost had
been \$100 rather than \$60 and (2) total variable cost
had been \$10 less at each level of output.

CH3/ Q6. "In the corn market, demand often exceeds supply and supply
sometimes exceeds demand." "The price of corn rises
and falls in response to changes in supply and demand." In
which of these two statements are the terms "supply" and
"demand" used correctly? Explain.

CH2/ Q2. What are economic resources? What categories do economists
use to classify them? Why are resources also called
factors of production? Explain: "If resources were unlimited
and freely available, there would be no subject called
economics."

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## Expected U.S. GDP growth rate going forward

You are the newly appointed President of the local Chamber of Commerce. You are making your first presentation to the Chamber and want to make a good first impression.

Your presentation will be based on the following topic, purpose, and audience.

â?¢Topic: Expected U.S. GDP growth rate going forward
â?¢Audience: Local chamber of commerce
â?¢Purpose: To give business leaders an idea of what the economy may look like based on recent history and expected future conditions
Part I

In addressing GDP, consider the following:

â?¢Trends, forecasts, and statistics
â?¢How GDP is determined
â?¢Interpreting GDP
and have at least one chart

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