#1
Which of the following is used to measure the total market value of all final goods and services produced within a country in a given period?
Gross Domestic Product (GDP)
ExplanationMeasure of total production within a country.
#2
Which of the following is NOT included in the calculation of Gross Domestic Product (GDP)?
Foreign investment
ExplanationExcluded from GDP calculation as it doesn't represent domestic production.
#3
What does GDP per capita measure?
The average income per person in a country
ExplanationAverage income of individuals in the country.
#4
What does a negative GDP growth rate indicate?
Economic recession
ExplanationSignifies a decline in economic output over a period of time.
#5
In the expenditure approach to calculating GDP, which component typically contributes the most to GDP?
Consumption
ExplanationSpending by households on goods and services.
#6
Which of the following statements accurately describes GDP per capita?
It measures the average income of individuals in a country
ExplanationAverage income per person in the country.
#7
If a country's GDP decreases while its population increases, what does this imply about the country's economic well-being?
The country's economy is shrinking
ExplanationIndicates a decline in economic output per person.
#8
Which of the following is an example of a government transfer payment and is not included in GDP calculations?
Social Security benefits
ExplanationNot part of GDP as it's a transfer payment, not a payment for goods or services.
#9
Which of the following is NOT a component of Gross Domestic Product (GDP) according to the income approach?
Government spending
ExplanationGovernment spending is not income to factors of production.
#10
Which of the following is an example of an intermediate good?
Steel purchased by an automobile manufacturer
ExplanationGoods used in production of other goods, not sold directly to consumers.
#11
What is the GDP deflator used for?
To adjust nominal GDP for inflation
ExplanationIndicator of inflation within an economy.
#12
Which of the following is a limitation of using GDP as a measure of economic welfare?
It doesn't account for income inequality
ExplanationGDP doesn't reflect how wealth is distributed among a population.
#13
Which of the following represents the formula for calculating GDP using the expenditure approach?
GDP = Consumption + Investment + Government Spending + (Exports - Imports)
ExplanationSum of consumption, investment, government spending, and net exports.
#14
Which of the following represents the formula for calculating GDP using the production approach?
GDP = Compensation of employees + Gross operating surplus + Gross mixed income + Taxes on production and imports - Subsidies
ExplanationSum of incomes earned by factors of production plus taxes on production and imports minus subsidies.
#15
What is the difference between GDP and GNP?
GDP measures the value of goods and services produced within a country's borders, while GNP measures the value produced by a country's residents, regardless of location
ExplanationGDP focuses on production within a country's borders, while GNP includes production by residents globally.
#16
Which of the following represents the formula for calculating GDP using the income approach?
GDP = Compensation of employees + Gross operating surplus + Gross mixed income + Taxes on production and imports - Subsidies
ExplanationSum of incomes earned by factors of production plus taxes on production and imports minus subsidies.