C+lg $500 $400 $300 $200 $100 C+lg C $100 $200 $300 $400 $500 GDP Refer to the diagram for a private closed economy. The $400 level of GDP is

Last year, a small nation with abundant forests cut down 200 worth of trees. It then turned 100 worth of trees into 150 worth of lumber. It used 100 worth of that lumber to produce $250 worth of bookshelves. Assuming the country produces no other outputs, and there are no other inputs used in producing trees, lumber, and bookshelves, what is this nations GDP? In other words, what is the value of the final goods the nation produced including trees, lumber and bookshelves?

What are typical GDP patterns for a high-income economy like the United States in the long run and the short run?

What is potential GDP?

Why do you suppose that U.S. GDP is so much higher today than 50 or 100 years ago?

Ethiopia has a GDP of 8 billion (measured in U.S. dollars) and a population of 55 million. Costa Rica has a GDP of 9 billion (measured in U.S. dollars) and a population of 4 million. Calculate the per capita GDP for each country and identify which one is higher.