Understanding the U.S. Economy: GDP and Inflation

What does GDP stand for?

• General Domestic Product

• Gross Domestic Product

• Governmental Domestic Product

• Gross Domestic Performance

What is considered the broadest quantitative measure of a nation's total economic activity?

• Inflation Rate

• Unemployment Rate

• Gross Domestic Product

• Consumer Price Index

Which of the following best describes inflation?

• A decrease in the price of goods and services over time

• An increase in the price of goods and services over time

• A stable price level of goods and services over time

• A decrease in the value of the stock market

Deflation is:

• The increase in the value of money over time

• The decrease in the overall level of prices for goods and services

• The process of adjusting interest rates by the Federal Reserve

• The increase in the cost of borrowing money

Which of the following is a common effect of inflation?

• Increased purchasing power of money

• Decreased cost of living

• Decreased value of money

• Increased savings rate

Real GDP is adjusted for:

• Population growth

• Inflation

• Exchange rates

• Interest rates

Which of the following would likely cause inflation?

• A decrease in consumer demand

• An increase in production costs

• A decrease in the money supply

• An increase in the unemployment rate

GDP per capita is an indicator of:

• A country's economic output that accounts for its number of people

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

• The average inflation rate of a country

• The total amount of capital invested in a country

Which of the following is NOT a component of GDP?

• Consumer spending

• Government spending

• Net exports

• Stock market investments

What does it mean if a country's GDP is increasing?

• The country is experiencing deflation

• The country's economy is shrinking

• The country's economy is growing

• The country's unemployment rate is increasing