The figure above shows the log of UK real GDP per capita between 1875 and 1914. Which of the following is correct?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
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Chapter5: Business And Economic Forecasting
Section: Chapter Questions
Problem 1.4CE
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The figure above shows the log of UK real GDP per capita between 1875 and
1914. Which of the following is correct?
Log of Real GDP per capita
10,5
10,0
9,5
9,0
8,5
8,0
7,5
1875
1890
5061
1920
1935
1950
1965
1980
y=0,0156x +7,7734
R²=0,94451
1995
2010
O The growth of GDP in the 1950s was above the long-run
average.
O The growth of GDP in the 1880s was above the long-run average.
In the figure the coefficient on x is 0.0156 and tells us the slope of the regression line (line
of best fit). If, instead, this were 0.02 the line would be flatter.
● The slope of the blue line tells us the rate of growth of per capita GDP but can tell us
nothing about the level.
Transcribed Image Text:The figure above shows the log of UK real GDP per capita between 1875 and 1914. Which of the following is correct? Log of Real GDP per capita 10,5 10,0 9,5 9,0 8,5 8,0 7,5 1875 1890 5061 1920 1935 1950 1965 1980 y=0,0156x +7,7734 R²=0,94451 1995 2010 O The growth of GDP in the 1950s was above the long-run average. O The growth of GDP in the 1880s was above the long-run average. In the figure the coefficient on x is 0.0156 and tells us the slope of the regression line (line of best fit). If, instead, this were 0.02 the line would be flatter. ● The slope of the blue line tells us the rate of growth of per capita GDP but can tell us nothing about the level.
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