Unit 2 Quiz 1 GDP

What is the main difference between real GDP and nominal GDP?

• nominal GDP uses current prices rather

  constantly changing prices in its calculations

• because nominal GDP focuses on the monetary

  value of goods and services exported from a

  country but does not account for the costs of

  imports

• real GDP accounts for inflation whereas nominal

  GDP does not

• because nominal GDP adjusts for inflation and

  does not accurately portray the base monetary

  value of a nation's economic activity

In 2016, the gross domestic product per capita in the US was approximately $57,500. What does this mean?

• Every person employed by a business in the US

  is paid $57,500 in income per year.

• The value of the US national debt divided by the

  number of people in the US is $57,500.

• The value of the total US economic output

  divided by the number of people in the US is

  $57,500.

• Every person in the US contributes $57,500 worth of economic output to the economy each

  year.

The gross domestic product (GDP) per capita of the United States is $50,859, which is much higher than most countries. Why is the GDP per capita often used as a sign of a country's standard of living?

• The higher a country's GDP per capita, the more

  income the nation has to meet the needs of the

  people.

• The higher a country's GDP per capita, the

  lower the cost of goods and services in the

  country.

• The higher a country's GDP per capita, the

  higher the incomes of most people in the

  country.

• The higher a country's GDP per capita, the

  higher the number of people living in comfort

  and wealth in the country.

What type of GDP is calculated with the current year's prices?

• Nominal GDP

• Real GDP

• Constant GDP

Gross Domestic Product is a method for calculating how much a country produces by adding which four spending categories?

• Wages, Rents, Interests, Dividends

• Consumption, Investment, Government, Next Exports

• Consumption, Investment, Government, Business Revenues

• Consumption, Interest Rates, Government, Next Exports

Which of the following events would cause GDP for 2019 to increase?

• In May 2019, James buys a Honda Accord

• In November 2019, Jordan buys a house in Arizona that was built in April 2018.

• In October 2019, Tiana eats tomatoes that she grew in her yard earlier that year.

• None of the above are correct

Which macroeconomic goal do investments in human capital and capital goods contribute to?

• the goal of price stability

• the goal of economic growth by increasing government spending

• the goal of price stability by increasing consumer spending.

• goal of economic growth by increase economic productivity.

Changes in gross domestic product MOST directly measure

• price inflation

• economic growth

• employment rates

• aggregate demand

What type of GDP is calculated with the current year's prices?

• Nominal GDP

• Real GDP

• Constant GDP

The United States has the highest per capita GDP in the world

• True

• False