Multiple Choice Questions on GDP and GNI

What does GDP (Gross Domestic Product) measure?

• The total income of a country's citizens abroad

• The total value of all final goods and services produced within a country's borders during a given time period

• The total money spent by the government in a year

• The total goods exported from a country in a year

What is GNI (Gross National Income)?

• The value of all imported goods and services

• The income of all permanent residents of a country during a given time period

• The total amount of government expenditure in a year

• The sum of all capital investments in a country

What is included in the GDP (Expenditure Method)?

• Consumer expenditure, investments, government spending, exports, and imports

• Only consumer expenditure and government spending

• Imports, exports, and taxes

• Consumer savings and exports

How do payments for imports (M) affect GDP?

• Increase GDP as money flows into the country

• Decrease GDP as money flows out of the country

• Have no effect on GDP

• Double GDP because they are paid for in foreign currency

If a country's Real GDP was $500 billion in 2022 and $510 billion in 2023, what was the economic growth rate?

• 1%

• 2%

• 10%

• 5%

Why is the Residual Item included in the Expenditure Method of GDP calculation?

• To adjust for exports and imports

• To account for errors and omissions and ensure expenditure and income methods match

• To track government spending more accurately

• To simplify the calculation process

What is a key difference between GDP and GNI?

• GDP excludes consumer spending, while GNI includes it

• GDP measures within a country's borders, while GNI includes income earned by residents abroad

• GNI is calculated yearly, while GDP is calculated monthly

• GDP only measures exports, while GNI measures imports

In the Expenditure Method, what is classified as "investments (I)"?

• Money spent by businesses to purchase capital goods and intermediate goods

• Money used by households to save in banks

• Money spent on foreign imports

• Government expenditure on infrastructure

If South Africa's Real GDP grew from $408 billion in 2021 to $410 billion in 2022, what does this indicate?

• The South African economy grew by 0.5%, producing more final products and services

• The South African government spent more money on public goods

• South Africa exported more goods than it imported

• The South African economy contracted by 0.5%

Which of the following best describes durable goods in GDP measurement?

• Goods that can only be used once and must be replaced immediately

• Goods that diminish in value slowly and provide long-term utility

• Intermediate goods used in the production process

• Goods that are imported from other countries