#1
Which of the following is not a component of Gross Domestic Product (GDP)?
Imports
ExplanationImports are not produced within the country's borders.
#2
Which of the following is not a measure of national income?
CPI
ExplanationCPI (Consumer Price Index) measures inflation, not national income.
#3
What does GDP stand for?
Gross Domestic Product
ExplanationGDP measures the total value of goods and services produced within a country's borders.
#4
Which of the following is included in the calculation of GDP?
Government spending
ExplanationGovernment spending contributes to the total value of goods and services produced.
#5
What is the formula for calculating Net National Product (NNP)?
GDP + Net Foreign Factor Income - Depreciation
ExplanationNNP accounts for foreign factor income and depreciation in the economy.
#6
What does the term 'Real GDP' refer to?
GDP adjusted for inflation
ExplanationReal GDP adjusts GDP for inflation, providing a more accurate measure of economic output.
#7
Which of the following is an indicator of economic growth?
Gross Domestic Product (GDP)
ExplanationGDP measures the overall economic output and is a key indicator of economic growth.
#8
Which of the following is subtracted from Gross Domestic Product (GDP) to obtain Net Domestic Product (NDP)?
Depreciation
ExplanationDepreciation accounts for the wear and tear on capital goods in the economy.
#9
What is the formula to calculate Gross National Product (GNP)?
GDP + Net Foreign Factor Income
ExplanationGNP includes the total value of goods and services produced by a country's residents, regardless of location.
#10
Which of the following represents a flaw in using Gross Domestic Product (GDP) as a measure of economic welfare?
It excludes household production and volunteer work
ExplanationGDP does not capture non-market activities such as household production and volunteer work.
#11
What is the primary difference between nominal GDP and real GDP?
Real GDP is adjusted for inflation, while nominal GDP is not.
ExplanationReal GDP accounts for changes in price levels, while nominal GDP does not.
#12
Which of the following is a limitation of using Gross Domestic Product (GDP) as a measure of economic well-being?
It does not account for the distribution of income.
ExplanationGDP does not consider how income is distributed among the population.
#13
What is the significance of the GDP deflator?
It is used to adjust nominal GDP for changes in the price level.
ExplanationThe GDP deflator measures inflation and adjusts nominal GDP to reflect real economic output.
#14
What is the difference between GNP and GDP?
GNP includes foreign income earned by residents, while GDP does not.
ExplanationGNP accounts for income earned by a country's residents, regardless of location.