#1
Which of the following is NOT included in Gross Domestic Product (GDP) calculation?
Unemployment benefits
ExplanationExcludes transfer payments such as unemployment benefits.
#2
In national income accounting, what does GDP stand for?
Gross Domestic Product
ExplanationGDP represents the total value of goods and services produced within a country.
#3
What does the term 'Nominal GDP' refer to?
GDP measured in current prices
ExplanationReflects the value of goods and services at current market prices.
#4
What is the expenditure approach to calculating GDP?
Summing up all expenditures made by households, firms, government, and foreigners
ExplanationCalculates GDP by adding up spending by various sectors.
#5
Which of the following is an example of a transfer payment?
Social security benefits
ExplanationTransfer payments involve redistribution of income without creating goods or services.
#6
What does GDP per capita represent?
The average income earned per person in a country
ExplanationGDP per capita measures the economic output per person.
#7
What is the main purpose of using the expenditure approach in calculating GDP?
To measure the total spending made by households, firms, government, and foreigners
ExplanationExpenditure approach quantifies total spending in the economy.
#8
What is the formula to calculate Gross National Product (GNP)?
GDP + Net Foreign Factor Income
ExplanationGNP includes GDP plus net income from abroad.
#9
Which of the following is a component of Aggregate Expenditure?
Personal Saving
ExplanationRepresents the amount saved by individuals.
#10
Which of the following is NOT a limitation of GDP as a measure of economic welfare?
It accurately captures all underground economic activities
ExplanationGDP doesn't account for underground or informal economic activities.
#11
Which of the following is a characteristic of an intermediate good?
It is used to produce final goods or services
ExplanationIntermediate goods are used in the production of other goods and services.
#12
What is the formula for calculating Net National Product (NNP) from Gross National Product (GNP)?
NNP = GNP - Depreciation
ExplanationNNP adjusts GNP by subtracting depreciation.
#13
What is the difference between Real GDP and Nominal GDP?
Real GDP is adjusted for inflation, while Nominal GDP is not
ExplanationReal GDP accounts for inflation, Nominal GDP does not.
#14
Which of the following is NOT a component of Aggregate Income?
Corporate profits taxes
ExplanationCorporate profits taxes are part of profits and are not considered as income.
#15
What does the term 'Value Added' represent in national income accounting?
The increase in the value of a product at each stage of production
ExplanationMeasures the additional value created by each stage of production.
#16
Which of the following is a measure of National Income that includes the depreciation of capital goods?
Net Domestic Product (NDP)
ExplanationNDP accounts for depreciation of capital goods in national income calculation.