Topic 2 Macroeconomics Quiz

What does GDP stand for?

• Gross Domestic Product

• General Domestic Product

• Gross Development Product

• General Development Product

Which of the following is NOT included in GDP?

• Household production

• Legal market transactions

• Investment spending

• Government purchases

What does the circular-flow diagram illustrate?

• The flow of international trade

• The flow of government spending

• The flow of goods and services

• The flow of income and expenditure

What is the formula for calculating GDP?

• Y = C + I + G + NX

• Y = C + I + G - NX

• Y = C - I + G + NX

• Y = C + I - G + NX

What does 'real GDP' measure?

• Total income of the economy

• Production at constant prices

• Total expenditure of the economy

• Production at current prices

Which component of GDP includes spending by households?

• Investment

• Net Exports

• Consumption

• Government Purchases

What is the GDP deflator used for?

• To determine real GDP

• To assess government spending

• To measure inflation

• To calculate nominal GDP

Which of the following is a component of GDP?

• Illegal market transactions

• Transfer payments

• Home production

• Consumption

What does nominal GDP value?

• Production at constant prices

• Only intermediate goods

• Production at current prices

• Only final goods

What is the primary measure of economic well-being according to the text?

• Inflation rate

• Unemployment rate

• Government spending

• GDP per capita