Economic growth

GDP = Consumption by households + Investment by producers + government spending + (imports - exports)

• True

• False

Nominal GDP can rise in value because of two of the below reasons. Which reason is not correct?

• The output of the country increases

• The general level of prices in the country decreases

• The general level of prices in the country increases

Which one of the following is NOT a method of calculating real GDP?

• income method

• savings method

• expenditure method

GDP per capita means

• real GDP per household

• real GDP per head

• real GDP per worker

If the real GDP for a given period is divided by the size of the population for that same period, it is known as

• GDP at factor cost

• GDP at market prices

• real GDP

• GDP per capita

Suppose that in the country of Xanadu, the real GDP in 2004 was R1883 billion. In 2005, real GDP was R1610 billion. In Xanadu, real GDP grew by

• 14.5%

• 17%

• -14.5%

• -17%

The following information is taken from the national accounts of Zambibia:

C = R200 million

I = R50 million

G = R150 million

X = R200 million

M = R180 million

Gross Domestic Expenditure is

• R400 million

• R420 million

• R600 million

• R380 million

If a country experienced a substantial loss of property due to a natural disaster, what would the impact be on the PPC?

• An upwards shift along the PPC

• A downwards shift along the PPC

• An inwards shift of the PPC

• An outwards shift of the PPC

Which of the following is not a cost of economic growth?

• Distribution of income becomes more unequal.

• Depletion of natural resources

• Decreased inflation

• Pollution and environmental damage

Which of the following is not a supply side policy to encourage economic growth?

• Subsidies on research & development

• Privatization & deregulation

• Lowering corporation tax

• A rise in investment