In an economy producing close to its capacity, demand rises quickly. Real GDP, household money incomes and tax revenue increase, alongside rapid price rises. Which assessment is best?
Households can buy less extra than the rise in their money incomes suggests, because prices are also rising
The growth will last, because rapid growth in demand adds to the economy's capacity to produce more in future
Prices will soon stop rising, because firms close to capacity can quickly expand output to meet the extra demand
The rise in real GDP comes only from higher prices, so the economy is not producing any extra output
78 exam-style questions on OCR GCSE Economics 3.1 Economic growth, covering 3.1.1 What is economic growth, 3.1.2 Calculate economic growth using GDP, 3.1.3 Explain how growth is measured, 3.1.4 Analyse GDP data, 3.1.5 Determinants of economic growth, and 3.1.6 Costs and benefits of economic growth. Each one has a worked solution and a mark scheme showing where the marks go.