#1
Which of the following is NOT a component of GDP?
Imports
ExplanationNot included in GDP calculation.
#2
What does GDP stand for?
Gross Domestic Product
ExplanationTotal value of goods and services produced within a country.
#3
Which of the following is NOT a type of unemployment recognized by economists?
Frictional unemployment
ExplanationResult of temporary transitions or search for better jobs.
#4
What does the abbreviation 'C' represent in the GDP equation (GDP = C + I + G + (X - M))?
Consumer spending
ExplanationExpenditure on goods and services by households.
#5
Which of the following is NOT a characteristic of a recession?
Increase in consumer spending
ExplanationDecrease in economic activity, employment, and income.
#6
What is the primary function of the GDP?
To measure the total value of goods and services produced within a country
ExplanationIndicator of economic performance and standard of living.
#7
What does 'I' represent in the GDP equation?
Investment
ExplanationSpending on capital goods.
#8
Which of the following is NOT included in the calculation of GDP?
Private investment in stocks and bonds
ExplanationNot considered as part of current production.
#9
Which of the following is an example of an intermediate good?
Flour purchased by a bakery to make bread
ExplanationUsed in production but not counted as final product.
#10
How is GDP calculated using the expenditure approach?
GDP = C + I + G + (X - M)
ExplanationSum of consumption, investment, government spending, and net exports.
#11
What does the GDP deflator measure?
The ratio of nominal GDP to real GDP
ExplanationReflects the level of prices relative to a base year.
#12
Which of the following is included in the calculation of Gross National Product (GNP) but not in GDP?
Net income earned from abroad
ExplanationIncome earned by residents from foreign investments.
#13
Which of the following best describes the term 'GDP per capita'?
The total GDP of a country divided by its total population
ExplanationAverage economic output per person.
#14
What does the 'income approach' measure in GDP calculation?
The total income earned by individuals and businesses within a country
ExplanationSum of wages, rents, interest, and profits.
#15
What is the difference between nominal GDP and real GDP?
Real GDP accounts for inflation, while nominal GDP does not
ExplanationReal GDP adjusts for price changes, nominal does not.
#16
What is the GDP formula used in the income approach?
GDP = Wages + Rent + Interest + Profit
ExplanationSum of all incomes generated in production.
#17
What does the term 'net exports' refer to in the GDP equation?
The difference between exports and imports
ExplanationContribution of trade balance to GDP.
#18
Which of the following is considered an example of a government transfer payment?
Social Security benefits
ExplanationRedistribution of income without goods or services provided in return.
#19
Which of the following is a limitation of GDP as a measure of economic well-being?
All of the above
ExplanationDoesn't account for income distribution, non-market transactions, and environmental factors.
#20
What is the formula for calculating Real GDP?
Real GDP = Nominal GDP / GDP deflator
ExplanationAdjusts nominal GDP for inflation.
#21
What is the relationship between nominal GDP and real GDP?
Nominal GDP equals Real GDP plus inflation
ExplanationNominal GDP reflects current prices, real GDP adjusts for inflation.
#22
What is the relationship between the unemployment rate and the business cycle?
Unemployment rate increases during a recession
ExplanationEconomic downturn leads to higher unemployment.
#23
What does the GDP per capita indicate about a country?
The GDP adjusted for population size
ExplanationAverage economic output per person, considering population.
#24
Which of the following is an example of frictional unemployment?
A recent college graduate searching for their first job
ExplanationTemporary unemployment during job transitions.