U2 Module 1 Topic 1

Which of the following is NOT a measure of calculating GDP?

• Output approach

• Income approach

• Exports approach

• Expenditure approach

Which of the following states the formula for calculating national income using the Expenditure approach?

• National Income = C + G + (X - M)
• National Income = C + I + G + (X - M)
• National Income = C + I + G + M
• National Income = C + I + G + X

The income approach method of calculating national income is

• The income approach focuses solely on government spending.
• The income approach sums all incomes earned by the factors of production used in creating goods and services

• The income approach calculates national income based on population size.
• The income approach only considers profits from businesses.

What does GDP stand for?

• Gross National Product
• Global Development Plan
• General Domestic Product
• Gross Domestic Product

How do you calculate Gross National Product?

• GNP = C + G + Net income from abroad
• GNP = C + I - G + (X + M)
• GNP = C + I + G + (X - M) + Net income from abroad
• GNP = C + I + G

Capital consumption can be defined as

• the depreciation of physical assets over time
• the cost of acquiring new assets
• the increase in asset value over time
• the total value of all assets

GDP at market prices and GDP at factor costs differ as a result of

• the calculation of depreciation in GDP at market prices.
• the inclusion of foreign investments in GDP at factor costs.
• the inclusion of taxes and exclusion of subsidies in GDP at market prices.
• the use of different currencies for GDP at factor costs.

Injections into the circular flow include

• Imports, savings, and taxes
• Government spending, investments, and exports
• Consumer spending, loans, and subsidies
• Wages, dividends, and interest payments

Withdrawals from the circular flow include

• government spending
• dividends
• exports
• savings, taxes, imports

Net national product is

• Net National Product is equal to GDP.
• Net National Product includes only government spending.
• Net National Product is GNP plus inflation.
• Net National Product (NNP) is GNP minus depreciation.