Lesson M2.1.1

M2.1.1 Economic growth, the economic cycle and real and nominal GDP Quiz: OCR Economics, Unit 7

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson M2.1.1, Economic growth, the economic cycle and real and nominal GDP: 20 multiple choice questions for the OCR Economics (H460), Unit 7: Economic policy objectives, written with Revision Ninja.

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The 20 questions

  1. What term describes an increase in an economy's total productive capacity over time?

    • Nominal growth
    • Actual growth
    • Potential growth
    • Cyclical growth

  2. How is a technical recession defined using real GDP data in the UK?

    • Four consecutive quarters
    • One single quarter
    • Two consecutive quarters
    • Three consecutive quarters

  3. Which economic measure adjusts nominal GDP for changes in the price level?

    • GDP per capita
    • Gross National Income
    • Net national product
    • Real GDP

  4. Which phase of the economic cycle follows a trough as real GDP starts rising?

    • Recession
    • Downturn
    • Peak
    • Recovery

  5. What figure is obtained when total real GDP is divided by the total population?

    • Real GDP per capita
    • Disposable personal income
    • Net national product
    • Nominal GDP growth

  6. What economic situation exists when actual GDP falls short of potential GDP?

    • Negative output gap
    • Positive output gap
    • Inflationary gap
    • Stagflation

  7. Which adjustment compares standard of living across currencies by assessing local purchasing power?

    • Purchasing Power Parity
    • Consumer Price Index
    • GDP deflator
    • Real exchange rate

  8. What type of growth occurs when an economy uses existing spare capacity to increase output?

    • Actual growth
    • Potential growth
    • Supply-side growth
    • Trend growth

  9. If nominal GDP grows by 5% and inflation is 2%, what is real GDP growth?

    • 7%
    • 3%
    • 2.5%
    • 10%

  10. If real GDP is £2,000 billion and population is 50 million, what is GDP per capita?

    • £40,000
    • £4,000
    • £100,000
    • £25,000

  11. An economy is producing output above its long-run potential rate. What gap is present?

    • Negative output gap
    • Trade gap
    • Fiscal gap
    • Positive output gap

  12. A government builds new high-speed rail lines. What type of growth does this primarily boost?

    • Nominal growth
    • Potential growth
    • Cyclical growth
    • Short-run growth

  13. If a country's real GDP index rises from 100 to 104, what is the annual growth rate?

    • 104%
    • 1.04%
    • 4%
    • 0.4%

  14. Which activity is excluded from official GDP calculations because it lacks a formal market price?

    • Export sales
    • Capital investment
    • Unpaid housework
    • Government health spending

  15. What economic situation is defined by high inflation combined with stagnant real GDP growth?

    • Stagflation
    • Hyperinflation
    • Disinflation
    • Deflation

  16. A surge in consumer spending shifts aggregate demand rightwards. What type of growth results?

    • Potential growth
    • Actual growth
    • Trend growth
    • Structural growth

  17. Which national accounting measure adds net primary income from abroad to total domestic GDP?

    • Real GDP
    • Gross Value Added
    • Net Domestic Product
    • Gross National Income

  18. When actual growth exceeds trend growth for too long, causing high inflation, what occurs?

    • Overheating
    • Stagflation
    • Hysteresis
    • Crowding out

  19. What term describes the long-run average rate of growth an economy can sustain without inflation?

    • Nominal growth rate
    • Actual growth rate
    • Cyclical growth rate
    • Trend growth rate

  20. Why might rising real GDP per capita fail to reflect better living standards for average citizens?

    • Ignores income inequality
    • Excludes capital investment
    • Ignores price inflation
    • Counts net exports

All OCR Economics quizzes