#1
Which of the following is not a component of GDP?
Unemployment rate
ExplanationIt's a measure of labor market conditions, not economic output.
#2
Which component of GDP represents the total value of goods and services produced within a country's borders?
Gross Domestic Product (GDP)
ExplanationIt encompasses all economic activity within a nation's territory.
#3
What does the acronym GDP stand for?
Gross Domestic Product
ExplanationIt quantifies the total economic output of a nation.
#4
Which of the following represents the largest component of GDP in most economies?
Personal consumption
ExplanationConsumer spending typically forms the bulk of economic activity.
#5
What does the term 'Gross' in GDP refer to?
Total before deductions
ExplanationGross implies without adjustments or subtractions.
#6
Which of the following is considered an economic indicator?
Unemployment rate
ExplanationIt signals the state of the labor market and economic health.
#7
If a country's GDP increases while its population decreases, what happens to GDP per capita?
Increases
ExplanationWith fewer people to divide the GDP among, GDP per capita rises.
#8
Which of the following is an example of a leading economic indicator?
Stock Market Index
ExplanationIt predicts future economic trends before they occur.
#9
Which of the following is included in the investment component of GDP?
Purchases of stocks and bonds
ExplanationThese investments contribute to economic growth and capital formation.
#10
What is the primary measure of inflation used to adjust GDP for changes in price levels?
Consumer Price Index (CPI)
ExplanationIt reflects changes in the cost of goods and services consumed by households.
#11
What is the formula to calculate GDP?
GDP = C + G + I + (X - M)
ExplanationIt sums up consumption, government spending, investments, and net exports.
#12
If a country's nominal GDP is $500 billion and its GDP deflator is 1.2, what is its real GDP?
$416.67 billion
ExplanationReal GDP accounts for inflation, making it $416.67 billion.
#13
What is the main reason GDP is criticized as a measure of economic welfare?
It doesn't account for environmental degradation
ExplanationGDP fails to consider negative impacts on the environment caused by economic activity.