GDP and Measuring GDP

What is GDP?

• Total value of final goods and services produced in a country over a specific period.

• Total amount households spend in the economy.

• Total assets of a country.

• Total amount paid for exported products.

When calculating GDP using the expenditure method, which factor is not included in GDP?

• Personal consumption expenditure

• Government spending

• Payments for transactions of old assets

• Business investment

Which method is used to calculate GDP through production (or value added)?

• Total value of final products

• Total expenditure in the economy

• Total value added of businesses in the economy

• Total national income

A key difference between nominal GDP and real GDP is:

• Nominal GDP is calculated at fixed prices, while real GDP is calculated at changing prices.

• Nominal GDP is calculated at current prices, while real GDP is calculated at fixed prices of the base year.

• Real GDP is calculated based on intermediate products, while nominal GDP is calculated based on final products.

• There is no difference.

When using the income method to measure GDP, what is a key component of national income?

• Wages and pensions

• Government expenditures

• Profits of companies

• All of the above

Why can the inflation rate distort the results of nominal GDP?

Why can the inflation rate distort the results of nominal GDP?

• Because it only measures output and does not account for price changes.

• Because it does not account for input products.

• Because inflation increases consumer spending.

• All of the above.

GDP calculated by the expenditure method includes all of the following factors, except:

• Personal consumption

• Business investment

• Government spending

• Change in asset value

What does the difference between a country's GDP and GDP per capita reflect?

• The level of industrial development.

• The distribution of income in the economy.

• The level of economic growth.

• The country's import rate.

To calculate real GDP, what do we need to do with nominal GDP?

• Add the consumer price index.

• Adjust according to the consumer price index (CPI).

• Multiply by the inflation rate.

• Add the level of international investment.