GDP Test

Gross domestic product is the total ____ produced within a country in a given time period.

• market value of all final and intermediate goods and services

• market value of all final and intermediate goods and services plus investment and depreciation

• amount of final and intermediate goods and services

• market value of all final goods and services

Let C represent consumption expenditure, S saving, I gross private domestic investment, G government purchases of goods and services, and NX net exports of goods and services. Then GDP equals

• C + S + G + NX.

• C + S + G – NX.

• C + I + G + NX

• C + I + G – NX

Which of the following is NOT part of GDP?

• General Motors’ purchases of new capital equipment

• Expenditures by the federal government for national defense

• Social security payments made to the elderly

• The purchase of new homes by consumers

Real GDP measures the

• total profits earned by all businesses valued using prices from a single year.

• changes in the prices of output measured in dollars

• general upward drift in prices.

• value of total production linked to prices of a single year.

Tropical Republic produces only bananas and coconuts. The base year is 2016, and the tables give the quantities produced and the prices.

1. Calculate nominal GDP in 2016 and 2017.

2. Calculate real GDP in 2017 expressed in base-year prices.

• Nominal $5600 in 2016

  Nominal $6100 in 2017

  Real GDP-2017-$6800

• Nominal $5700 in 2016

  Nominal $6100 in 2017

  Real GDP-2017-$6800

• Nominal $5600 in 2016

  Nominal $6100 in 2017

  Real GDP-2017-$6700

• Nominal $5600 in 2016

  Nominal $6200 in 2017

  Real GDP-2017-$6800

An economy produces only apples and oranges. The base year is 2015, and the table gives the quantities produced and the prices.

1. Calculate nominal GDP in 2015 and 2016.

2. Calculate real GDP in 2015 and 2016 expressed in base-year prices.

• In 2015 nominal GDP is $50 and in 2016 nominal GDP is $700.

  Real GDP in 2015 is $50 and in 2016 is $135

• In 2015 nominal GDP is $50 and in 2016 nominal GDP is $600.

  Real GDP in 2015 is $50 and in 2016 is $135

• In 2015 nominal GDP is $40 and in 2016 nominal GDP is $600.

  Real GDP in 2015 is $50 and in 2016 is $135

• In 2015 nominal GDP is $50 and in 2016 nominal GDP is $600.

  Real GDP in 2015 is $60 and in 2016 is $135

use this link https://youtu.be/p6lkDjq8-tw

or watch week 01, session 04 2nd video and answer the question

Why Real GDP is more important than Nominal GDP?

• For economic growth

• Inflation

• Price level and know the basket

• deflation

What is the difference between real GDP and nominal GDP?

• Real GDP includes inflation while nominal GDP does not

• Real GDP is adjusted for inflation while nominal GDP is not

• Real GDP is always higher than nominal GDP

• Real GDP is not affected by changes in prices

Which of the following is included in the calculation of GDP?

• Government purchases of goods and services

• Stock market investments

• Foreign aid

• Personal savings

What does GDP measure?

• The total value of all goods and services produced within a country

• The total value of all goods and services consumed within a country

• The total value of all goods and services imported into a country

• The total value of all goods and services exported from a country