Understanding GDP and Economic Terms

What does GDP stand for? A) Gross Domestic Product B) General Domestic Price C) Global Development Plan D) Gross Development Product

• A) Gross Domestic Product

• General Development Plan

• Gross Domestic Price

• Global Domestic Product

Which of the following is an example of Nominal GDP?

• C) The total value of all services provided in a year at constant prices

• B) The total value of all cars sold in a year at current prices

• A) The value of all goods produced in a country adjusted for population size

• D) The value of all goods produced in a country including intermediate goods

What is Real GDP?

• GDP calculated only from imports

• GDP that includes only private sector spending

• GDP measured at constant prices

• C) GDP adjusted for inflation to reflect true economic growth

What are final goods?

• D) Goods that are exported to other countries

• B) Goods that are sold to consumers for their final use

• A) Goods that are used to produce other goods

• C) Goods that are not sold in the market

What does the term 'inflation' refer to?

• B) An increase in the general price level

• A decrease in the general price level

• A temporary rise in prices

• A measure of currency stability

What is the primary purpose of GDP?

• D) To measure a country's military strength

• B) To measure a country's economic performance

• C) To measure a country's cultural heritage

• A) To measure a country's literacy (educated people) rate

Which of the following is NOT included in GDP calculations?

• G) Charitable donations

• E) Personal savings

• F) Stock market gains

• A) Household production

What is the difference between GDP and GNP?

• GDP measures total income, while GNP measures total expenditure

• GNP includes only goods, while GDP includes services

• GDP and GNP are the same concept

• A) GDP measures domestic production, while GNP measures national production

2. If your neighbor buys a new lawnmower for his yard, which component of GDP does this fall under?

• • Consumption (C)

• • Net Exports (NX)

• • Government Purchases (G)

• • Investment (I)

2. Which of the following is NOT counted in GDP?

• • A used book sold at a garage sale

• • A government project to build a new highway

• • A pizza delivery to your house

• • A used book sold at a garage sale