Figure 15-4

-Refer to Figure 15-4.In the figure above,LRAS₁ and SRAS₁ denote LRAS and SRAS in year 1,while LRAS₂ and SRAS₂ denote LRAS and SRAS in year 2.Given the economy is at point A in year 1,what is the growth rate in potential GDP in year 2?
A) 8%
B) 9.1%
C) 10%
D) 12%

Question

Figure 15-4
 
-Refer to Figure 15-4.In the figure above,LRAS₁ and SRAS₁ denote LRAS and SRAS in year 1,while LRAS₂ and SRAS₂ denote LRAS and SRAS in year 2.Given the economy is at point A in year 1,what is the growth rate in potential GDP in year 2?
A) 8% 
B) 9.1% 
C) 10% 
D) 12%

Quizplus · Accepted Answer

The growth rate in potential GDP is calculated by the percentage increase in the LRAS from year 1 to year 2. If LRAS₂ is 10% higher than LRAS₁, then the growth rate is 10%.

Figure 15-4 -Refer to Figure 15-4.In the Figure Above,LRAS₁ and SRAS₁ Denote