GDP MC

Which of the following is true of Gross Domestic Product (GDP)?

• Intermediate goods are not counted because GDP does not include imports from foreign countries
• Household production, like home auto repair, is counted in GDP
• Transfer payments are not included in GDP because government expenditures are not counted
• GDP, adjusted for inflation, measures economic growth over time

Which of the following is clearly not included in the calculation of GDP for the United States?

• The money that consumers spend on online purchases
• The income earned by public school teachers
• A delivery truck purchased by an American company
• A government payment to an individual on welfare

The value of which of the following is counted in the U.S. GDP?

• Salary bonuses given to investment bankers
• Foreign countries buying US treasury bills
• Transfer payments to the elderly
• Undeclared wages paid to illegal immigrants

When calculating GDP, the word investment is best defined as 

• Spending on stocks, bonds, and financial assets
• Spending by the central bank on government securities
• Business spending on capital goods
• Government policies to stabilize the economy

The income approach to calculating GDP mostly involves adding

• Spending by consumers, businesses, governments, and other countries
• Rent, wages, interest, profit
• The money generated through household production
•  Investment and savings in the private sector

If a country’s percent change in real GDP is positive, which of the following must be true?

• The price level has increased
•  The inflation rate was negative
• The real GDP per capita has increased
• The country is producing more output

A recession is commonly defined as two consecutive quarters of 

• Increasing employment
• Decreasing standard of living
• Decreasing real GDP
• Decreasing nominal GDP