Lesson 2.1.1

2.1.1 Economic growth Quiz: Pearson Edexcel Economics, Unit 2

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 2.1.1, Economic growth: 20 multiple choice questions for the Pearson Edexcel Economics (9EC0), Unit 2: Theme 2: The UK economy – performance and policies, written with Revision Ninja.

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The 20 questions

  1. Which percentage change best measures economic growth over time?

    • Consumer Price Index
    • Real GDP
    • Current account surplus
    • Nominal GDP

  2. What economic factor is removed to convert nominal GDP into real GDP?

    • Population growth
    • Net exports
    • Inflation
    • Taxation

  3. What is total GDP divided by to calculate GDP per capita?

    • Inflation rate
    • Total employment
    • Working age population
    • Total population

  4. What is added to GDP to calculate Gross National Income?

    • Indirect taxes
    • Net exports
    • Net primary income
    • Government spending

  5. What difference between countries does Purchasing Power Parity adjust for?

    • Exchange rate volatility
    • Population sizes
    • Tax rates
    • Price levels

  6. Which unrecorded activity is a key limitation when using GDP to compare living standards?

    • Export sales
    • Government expenditure
    • Shadow economy
    • Capital investment

  7. According to economic theory, what happens to the happiness gain from income as income rises high above basic needs?

    • It remains constant
    • It becomes negative
    • It increases exponentially
    • It diminishes

  8. Real GDP was 1,000 billion in year 1 and 1,030 billion in year 2. What is the rate of economic growth between the two years?

    • 3%
    • 1.03%
    • 30%
    • 103%

  9. Nominal GDP rises from 2,400 to 2,520 billion while the price index rises from 100 to 105. Approximately what is the real GDP growth rate?

    • 5%
    • -5%
    • 0%
    • 2.5%

  10. GDP is 1.2 trillion and the population is 60 million. What is GDP per capita?

    • 200,000
    • 2,000
    • 72,000,000
    • 20,000

  11. If real GDP grows at a steady 2% a year, roughly how many years does it take for real GDP to double? (Use the rule of 70.)

    • 50 years
    • 70 years
    • 35 years
    • 20 years

  12. Real GDP grows by 6% while the population grows by 4%. Approximately what is the growth rate of real GDP per capita?

    • 6%
    • about 1.9%
    • 0.4%
    • 10%

  13. Nominal GDP grows by 7% in a year when the price level rises by 3% and population rises by 1%. Which is closest to the growth rate of real GDP per person?

    • 3.9%
    • 4.0%
    • 7.0%
    • 2.9%

  14. If nominal GDP increases solely due to higher prices, what has increased?

    • Real output
    • Output volume
    • Output value
    • Productivity

  15. Which metric best compares living standards between countries by adjusting for cost of living?

    • Real GDP
    • PPP GDP per capita
    • Nominal GDP
    • Total GNI

  16. Why might GDP growth fail to improve living standards for the average household?

    • Unequal income distribution
    • Increased savings rates
    • High interest rates
    • Falling import prices

  17. Which uncounted cost of rapid economic growth can cause sustainable welfare to fall?

    • Increased import costs
    • Rising consumer debt
    • Environmental degradation
    • Higher tax revenue

  18. What value is positive when a country's gross national income exceeds its total gross domestic product?

    • Net trade balance
    • Current account deficit
    • Capital transfers
    • Net income from abroad

  19. Nominal GDP rises by 10% and the GDP deflator rises by 4% between two years. Real GDP growth is approximately:

    • 14%
    • 10%
    • 0.4%
    • 5.8%

  20. What distorts nominal GDP growth when comparing output across different years?

    • Population change
    • Inflation
    • Unemployment
    • Exchange rates

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