L06 GDP

Poll

In which countries are people on average least satisfied with their lives?

• Low-income countries

• Middle-income countries

• High-income countries

Multiple Choice

In 2022, Australia and South Korea had roughly the same GDP: approximately 1.6 trillion in current U.S. dollars. However, Australia's total population (almost 26 million people) is about half the size as South Korea's population (over 51 million people). Which country has the higher GDP per capita?

• Australia

• South Korea

Multiple Choice

How is Real GDP different from Nominal GDP?

• Real GDP is adjusted for inflation, and nominal GDP is measured in current prices

• Real GDP includes goods and services, and nominal GDP only includes goods

• Real GDP averages income over time, and nominal GDP is just this year.

Multiple Choice

Why doesn't GDP count expenditures on intermediate goods?

• To make GDP calculations easier

• Because intermediate goods are used by firms instead of consumers

• To avoid double counting

• Intermediate goods have no market value

Multiple Choice

Which category of GDP is affected by the following scenario? (Or, is the scenario not included in GDP calculations?)

"A farmer buys a new tractor"

• Consumption

• Investment

• Government Expenditures

• Net Exports

Multiple Choice

Which category of GDP is affected by the following scenario? (Or, is the scenario not included in GDP calculations?)

"You spend $17 for admission into a movie theater"

• Consumption

• Investment

• Government Expenditures

• Net Exports

Multiple Choice

Which category of GDP is affected by the following scenario? (Or, is the scenario not included in GDP calculation?)

"A public school district decreases the length of the school year in order to reduce its spending"

• Consumption

• Investment

• Government Expenditures

• Net Exports

Multiple Choice

Which category of GDP is affected by the following scenario? (Or, is the scenario not included in GDP calculations?)

"Worried about economic instability, people start hiding cash under their mattresses instead of spending it on restaurants and clothes."

• Consumption

• Investment

• Government Expenditures

• Net Exports

Multiple Choice

What is the biggest component of GDP?

• Consumption [C]

• Investment [I]

• Government purchases [G]

• Net Exports [NX]

Open Ended

Measuring the size of the economy can help economists identify whether the economy is operating at its greatest capacity, which is useful for answering questions about the economy's EFFICIENCY. What is a DIFFERENT VALUE that we may wish to consider alongside (or instead of) efficiency?