Question

In 2002, the annual price of oil was $24.36. As of late July 2006, the annual price of oil was $62.07. The percentage increase in real GDP from 2001 to 2005 was about 12.6 percent. This indicates that: a. real GDP grew at a faster pace than oil prices but at a healthy pace. b. oil prices increased faster than real GDP, but real GDP still grew at a healthy pace. c. real GDP grew at the same pace as oil prices, but this was a healthy pace. d. oil prices increased faster than real GDP, so real GDP did not grow at a healthy pace.

Answer 1

Answer:

b. oil prices increased faster than real GDP, but real GDP still grew at a healthy pace.

Explanation:

In this example, we compare the annual price of oil and the annual increase in GDP. When we look at the two, we can see that oil prices increased faster than real GDP. Nevertheless, we can also see that GDP still grew at a healthy pace.

GDP refers to Gross Domestic Product. This concept describes the monetary value of all good and services produced within a country's borders in a certain time period. GDP does not describe all the specific economic conditions of a country. However, it is still a useful measure for politicians and researchers in order to estimate the relative health of a country's economy.