#1
Which of the following is included in the calculation of Gross Domestic Product (GDP)?
All of the above
ExplanationGDP includes consumption, investment, government spending, and net exports.
#2
What does GDP stand for?
Gross Domestic Product
ExplanationGDP measures the total value of goods and services produced within a country.
#3
Which of the following is a measure of a nation's total output?
Gross Domestic Product (GDP)
ExplanationGDP quantifies the total value of all goods and services produced in a country.
#4
What is the largest component of GDP in most countries?
Consumption
ExplanationConsumption typically constitutes the largest portion of GDP.
#5
What does GDP measure?
The total value of all goods and services produced within a country in a given period
ExplanationGDP captures the aggregate economic output within a nation over a specific timeframe.
#6
Which of the following is not a component of GDP?
Imports
ExplanationImports are not counted in GDP, only exports are.
#7
If a country's GDP increases while its population remains constant, what can you infer about the standard of living?
It has increased
ExplanationA rise in GDP per capita indicates an improvement in the standard of living.
#8
Which of the following is an example of an intermediate good?
Steel purchased by a car manufacturer
ExplanationIntermediate goods are used as inputs in the production of other goods and services.
#9
What does GDP per capita measure?
The average income per person in a country
ExplanationGDP per capita measures the average income distributed among the population.
#10
Which of the following would be considered a part of investment in the calculation of GDP?
A company buying new machinery for its factory
ExplanationInvestment includes spending on capital goods that will be used in production.
#11
Which of the following best describes the expenditure approach to calculating GDP?
It calculates GDP by summing all expenditures on final goods and services in an economy.
ExplanationThe expenditure approach tallies up all spending on finished goods and services.
#12
Which approach calculates GDP by summing the incomes that firms pay households for the factors of production they hire?
Income approach
ExplanationThe income approach calculates GDP by summing up all factor incomes.
#13
What is the equation used to calculate GDP using the expenditure approach?
GDP = C + I + G + (X - M)
ExplanationThe expenditure approach sums up consumption, investment, government spending, and net exports.
#14
In the income approach to calculating GDP, which of the following is NOT included as a factor of production?
Consumer spending
ExplanationConsumer spending is not considered a factor of production but rather a component of GDP.
#15
What is the difference between nominal GDP and real GDP?
Real GDP is adjusted for inflation, while nominal GDP is not.
ExplanationNominal GDP is measured at current prices, while real GDP is adjusted for price changes over time.
#16
What does the GDP deflator measure?
The ratio of nominal GDP to real GDP
ExplanationThe GDP deflator is a measure of price level changes in an economy.
#17
If a country's GDP is increasing, but its GDP per capita is decreasing, what could be happening?
The population is growing faster than the economy.
ExplanationAn increase in population can offset the growth in GDP per capita.