Macroeconomics 20th Edition by Campbell McConnell,Stanley Brue,Sean Flynn

Exercise 2

Refer to Figure 8.2 and assume that the values for points a, b, and c are $10 billion, $20 billion, and $18 billion respectively. If the economy moves from point a to point b over a 10-year period, what must have been its annual rate of economic growth? If, instead, the economy was at point c at end of the 10-year period, by what percentage did it fall short of its production capacity?