#1
Which of the following is included in the calculation of GDP?
Government purchases of goods and services
ExplanationGovernment spending contributes to GDP calculation.
#2
Which of the following is an example of a final good or service?
A loaf of bread purchased by a consumer
ExplanationFinal goods are those purchased by consumers for consumption.
#3
Which of the following is an example of an investment expenditure in the calculation of GDP?
Purchases of new machinery by a factory
ExplanationInvestment in machinery contributes to GDP as it enhances production capacity.
#4
Which of the following would be considered an example of consumption expenditure in the calculation of GDP?
A household buying groceries
ExplanationHousehold spending on goods and services contributes to GDP.
#5
Which of the following best describes the relationship between GDP and standard of living?
Higher GDP may or may not lead to a higher standard of living
ExplanationGDP is a measure of economic activity, not necessarily of quality of life.
#6
Which of the following is included in the calculation of GDP under the expenditure approach?
Business inventory changes
ExplanationChanges in inventory levels are considered part of GDP under the expenditure approach.
#7
Which component of GDP represents the total value of all goods and services produced by a country's residents, regardless of where they are located?
Gross National Product (GNP)
ExplanationGNP includes all production by residents, regardless of location.
#8
If a country's GDP is $10 trillion and its government expenditures are $2 trillion, what is the percentage of government spending in the GDP?
25%
ExplanationGovernment spending is 25% of the GDP ($2 trillion out of $10 trillion).
#9
Which of the following is not counted in the calculation of GDP?
The sale of a used car
ExplanationUsed goods transactions are not included in GDP calculation.
#10
Which of the following is an example of government transfer payments?
Social security benefits
ExplanationTransfer payments are made without exchange of goods or services.
#11
Which of the following is not a component of GDP?
Imports
ExplanationImports are not part of GDP; they are subtracted in the calculation of net exports.
#12
Which of the following is considered an example of a capital good?
A piece of machinery used in manufacturing
ExplanationCapital goods are used in production and contribute to future output.
#13
Which of the following would be considered an intermediate good?
Steel purchased by an automobile manufacturer to produce cars
ExplanationIntermediate goods are used in production and are not sold directly to consumers.
#14
Which of the following is included in the calculation of net exports (NX)?
Exports minus imports
ExplanationNet exports account for the difference between exports and imports.
#15
Which of the following statements accurately describes the underground economy in relation to GDP?
The underground economy is difficult to quantify and may not be accurately reflected in GDP
ExplanationActivities in the underground economy are often unreported and therefore not captured in GDP.
#16
Which of the following would be considered a non-market transaction?
Volunteer work
ExplanationNon-market transactions involve goods or services not exchanged for money.
#17
Which of the following is considered an example of a durable good?
A computer
ExplanationDurable goods are products with a long lifespan.