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AP Macroeconomics 5.6 Economic Growth Questions

Practise measuring long-run growth with real GDP per capita, explaining productivity and capital formation, and representing capacity with the PPC, LRAS, and production function.

Syllabus
Effective Fall 2022
Course
AP Macroeconomics

Exam points

  • calculate real GDP per capita and use changes across years to judge growth and living standards
  • distinguish labour, technology, and physical or human capital as determinants of productivity and growth
  • use the production function to separate employment-driven output changes from productivity shifts
  • explain how investment and capital formation change output per worker, potential GDP, and long-run growth
  • represent productive-capacity changes with corresponding PPC and LRAS shifts or a sector-specific PPC rotation

Covered syllabus points

MEA-2.B—a. Define measures and determinants of economic growth. b. Explain (using graphs and data as appropriate) the determinants of…MOD-1.C—Explain (using graphs as appropriate) how the PPC is related to the long-run aggregate supply (LRAS) curve

Question 1

[Maximum number: 1]

The table provided shows economic data for the country of Louland. The base year is year 1, and the GDP deflator in year 2 is 115.

Table for Question 1 — AP Macroeconomics

Did the standard of living of the average citizen in Louland increase, decrease, or remain the same from year 1 to year 2 ? Explain using numbers.

Question 2

[Maximum number: 1]

A country is at full employment and produces two types of goods: consumer goods and capital goods.

Referring to your answer to part (c), will the long-run aggregate supply curve shift to the right, shift to the left, or remain the same? Explain.

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