Short free-response question
Growth in output per person
- Units 3 and 5
- 5 points
- About 12 minutes
You can use a calculator on this question, just like on exam day.
A shorter question on one or two models, often with data in a table. You might calculate something like an unemployment rate, real GDP or the spending change needed to close a gap, draw a labeled graph (described in words on this site), and explain an effect. On the exam: Questions 2 and 3 of 3 in Section II; each is worth a quarter of the section score, with about 12 minutes suggested for each. A four-function calculator is allowed.
The question and its sources
The table shows data for the economy of Kendall in two consecutive years. Real GDP is measured in base-year dollars.
Table 1. Real GDP and population in Kendall
| Year | Real GDP (billions of dollars) | Population (millions) |
|---|---|---|
| Year 1 | 500.0 | 25.00 |
| Year 2 | 525.2 | 25.25 |
Source: Hypothetical data
Suggested time: 12 minutes
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Part (a)
1 pointCalculate Kendall's real GDP per capita in Year 2. Show your work.
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Part (b)
1 pointCalculate the growth rate of real GDP per capita in Kendall from Year 1 to Year 2. Show your work.
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Part (c)
1 pointKendall's government expands funding for job training programs. Explain how this policy could increase Kendall's real GDP per capita in the long run.
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Part (d)
2 pointsDescribe a correctly labeled graph of Kendall's long-run aggregate supply, and show the long-run effect of the job training programs.
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