GDP Trade

What are the components of GDP?

• Consumption, Investment, Government Spending, Net Exports

• Exports, Imports, Savings, Taxes

• Consumption, Exports, Imports, Government Spending

• Investment, Taxes, Net Exports, Savings

Explain the importance of GDP in a country's economy.

• GDP is important in understanding the overall economic performance and well-being of a country.

• GDP is only relevant for small countries

• GDP has no impact on the economy

• GDP is a measure of population growth

How is GDP growth rate calculated?

• GDP growth rate = ((GDP present period - GDP previous period) / GDP previous period) * 100

• GDP growth rate = (GDP present period / GDP previous period) * 100

• GDP growth rate = (GDP present period - GDP previous period) / GDP previous period

• GDP growth rate = (GDP present period + GDP previous period) / GDP previous period

Define externality in the context of GDP.

• The measurement of GDP based on individual transactions

• The impact of social activities on economic growth

• The direct impact of economic activities on the involved parties

• Impact of economic activities on third parties not directly involved in the transaction.

Which component of GDP includes personal consumption expenditures?

• Investment

• Consumption

• Net exports

• Government spending

Why is GDP considered a key indicator of economic performance?

• GDP measures the total value of all goods and services produced within a country's borders over a specific period.

• GDP measures the average income of individuals in a country

• GDP only considers the financial sector of the economy

• GDP is not influenced by international trade

What is the formula to calculate GDP growth rate?

• GDP final / GDP initial

• GDP final - GDP initial

• GDP final + GDP initial

• ((GDP final - GDP initial) / GDP initial) * 100

Give an example of a positive externality.

• Education

• Pollution

• Traffic congestion

• Unemployment

How does government spending impact GDP?

• Government spending has no impact on GDP

• Government spending decreases GDP

• Government spending only impacts inflation, not GDP

• Government spending impacts GDP by directly contributing to the total amount of money spent on goods and services, which in turn stimulates economic activity and leads to an increase in GDP.

Discuss the role of net exports in GDP calculation.

• Net exports are excluded from GDP calculation as they are not considered significant.

• Net exports are only included in GDP calculation if they have a negative impact on the economy.

• Net exports are calculated separately from GDP and do not affect the final value.

• Net exports are included in GDP calculation to reflect the impact of international trade on a country's economy.