2.1 Circular Flow and GDP

Expectant parents buy supplies for the nursery.  Would this be included in GDP? 

• Yes - Consumer Spending
• Yes - Investment 
• No - Intermediate goods
• No - Non-market activity

The trade in exotic animals being illegally sold as pets is a multi-billion-dollar-a-year industry.  Is this included in GDP?

• Yes - Consumer spending
• Yes - Government Spending
• No - Underground Economy 
• No - Non-market activity 

Each individual on food stamps in Florida can receive up to $194 a month. Is this included in government spending?

• Yes - Government spending

• Yes - Consumer Spending

• No - Intermediate Goods

• No - transfer payment

Output per person, calculated as real GDP divided by the total population.   

• GDP/Capita
• GDP
• Productivity  
• Investment 

Business spending on physical capital, new homes, and inventories is counted in which component of GDP?

• consumption
• investment
• government spending
• imports-exports

Which items are added together to get Gross Domestic Product?

• Consumption, government spending, net exports, and treasury bonds
• Consumption, Interest payments, government spending, and net exports
• Consumption, aggregate demand, aggregate supply, and net exports
• Consumption, investment, government spending, and net exports

Mary Johnson purchases a laptop made in Japan. Determine the appropriate category of GDP.

• Consumer spending

• Investment spending

• Not included

• Net Exports

What are the four main parts of the circular flow diagram?

• Resource Market, Stock Market, Factor Market, Fish Market

• Resource Market, House Market, Factor Market, Good Market

• Resource Market, Product Market, Households, Firms

• Resource Market, households, Stock Market, super market

Using the following figures, find GDP.

Consumption = 11.2 billion

Investment = 2.5 billion

Stocks= 1 billion

Public Sector = 3.1 billion

Exports = 2.2 billion

Imports = 2.7 billion.

• $16.8 billion

• $17.3 billion

• $21.7 billion

• $16.3 billion

Calculate GDP economic growth over the following time period.

January 2017: 10,000

January 2018: 15,000

• .5%

• 50%

• 20%

• 15%