Concepts of GDP Quiz

Question 1: What is the formula for calculating GDP?

• GDP = C - I + G

• GDP = C + I + G + (X-M)

• GDP = X - M

• GDP = A + B + C

Question 2: Explain the expenditure approach to calculating GDP.

• It includes spending on goods and services outside of a country's economy.

• It only includes spending on goods and excludes services within a country's economy.

• It involves subtracting all the spending on goods and services within a country's economy.

• It involves adding up all the spending on goods and services within a country's economy.

Question 3: What are the four main components of GDP?

• consumption, investment, government spending, and net exports

• savings, imports, exports, inflation

• population, unemployment, inflation, trade balance

• exports, imports, government debt, inflation

Question 4: Describe the income approach to calculating GDP.

• Measuring the value of all goods and services produced in a country

• Adding up all the incomes earned by individuals and businesses in a country

• Calculating the total amount of government spending in a country

• Counting the total number of people in a country

Question 5: What is the difference between real GDP and nominal GDP?

• Real GDP includes government spending, while nominal GDP does not include government spending.

• Real GDP is used for future projections, while nominal GDP is used for historical analysis.

• Real GDP is calculated quarterly, while nominal GDP is calculated annually.

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

Question 7: Define GDP per capita and explain its significance.

• GDP per capita is the measure of a country's total land area divided by its population.

• GDP per capita is the measure of a country's economic output per person. It is calculated by dividing the country's GDP by its population.

• GDP per capita is the measure of a country's total debt divided by its population.

• GDP per capita is the measure of a country's total exports divided by its population.

Question 8: How is GDP per capita calculated?

• By multiplying the country's GDP by its population.

• By subtracting the country's GDP from its population.

• By adding the country's GDP and its population.

• By dividing the country's GDP by its population.

GDP formula of a closed economy

• C+I+G

• C+I+G+(X-M)

• C+G+(X-M)

• G+I++(X-M)

Which among the following is not the method of calculating GDP?

• Income Method

• Expenditure Method

• Product Method

• Payment Method

GDP Deflator=

• Nominal GDP/Real GDP x 100

• Real GDP/Nominal GDP x 100

• Real GDP/Nominal GDP x 1000

• Nominal GDP/Real GDP x 50