3.1 Understanding GDP Quiz

GDP stands for ​ (a)   .

• Gross Domestic Product
• Great Domestic Product
• General Domestic Policy

The definition of GDP is the market value of all finished goods and services produced within a  ​ (a)   in a ​ (b)   ​.

• country
• year
• month
• quarter
• state
• region

What is an intermediate good?

• A good used in the final production of another good

• A good sold directly to consumers

• A service provided to businesses

• A raw material extracted from nature

An intermediate good is counted towards GDP.

• True

• False

What is an example of a finished good?

• Crude oil

• Iron ore

• Smartphone

• Wheat

If a restaurant buys a pizza stone this year to make pizza, will the pizza stone count towards GDP?

• Yes, because it is a business investment in capital goods

• No, because it is considered a household purchase

• Yes, but only if the pizza stone is produced domestically

• No, because it is an intermediate good

If you buy a sweater from the thrift store (or on eBay), does this count towards GDP? Why or why not?

• Yes, because it is a transaction involving a good.

• No, because it is not a new production.

• Yes, because all sales count towards GDP.

• No, because it only includes services, not goods.

If an Italian buys some jewelry you made in January at your home and sold on Etsy, does this count towards U.S. GDP?

• Yes, because it is a product made in the U.S. and sold.

• No, because the buyer is not a U.S. resident.

• Yes, but only if the transaction was reported to the IRS.

• No, because it was sold on an online platform.

If you buy some avocados from Mexico, does this count in GDP?

• Yes, because it is a consumption expenditure by households.

• No, because it is an import and does not count in the country's GDP.

• Yes, because all transactions count in GDP.

• No, because it only counts in Mexico's GDP.

Of the three things listed below, highlight everything that is included in U.S. GDP. a. You mow your family's lawn. b. You pay the neighbor's kid in cash to mow the lawn. c. You hire a landscaping company to mow the lawn.

• You mow your family's lawn

• You pay the neighbor's kid in cash to mow the lawn

• You hire a landscaping company to mow the lawn