GDP and CPI Worksheet

Imagine you're at a bustling marketplace with Ava, Evelyn, and Noah. What does nominal GDP measure in this vibrant scene?

• The value of goods and services adjusted for inflation

• Only the growth rate of an economy

• The value of goods and services at current prices

• Total income earned by all citizens

Imagine you're in a bustling marketplace with Anika, Priya, and Luna. You're comparing the prices of goods from last year to this year. What does real GDP account for that nominal GDP does not?

• Government spending

• Inflation

• Net exports

• Income inequality

Imagine you're an economic detective like Henry, trying to uncover the secrets of a country's prosperity. Which of the following clues best describes the importance of GDP?

• It shows the level of taxation in an economy

• It tracks unemployment rates

• It indicates the level of economic growth and prosperity

• It measures inflation directly

Imagine you're in a bustling marketplace with Anika, Noah, and Aiden, trying to calculate the total economic activity. Which formula would you use to calculate the GDP?

• C + T + S + I

• C + I + G + Xn

• G + I - C + X

• CPI x Real GDP

Imagine you're at a fun fair with Nora, Evelyn, and Zoe. Suddenly, you hear a loudspeaker announcement: "Attention, everyone! Can you tell us what CPI stands for?"

• Consumer Product Investment

• Consumer Price Index

• Commercial Price Indicator

• Cost Price Indicator

Imagine you're in a classroom with Daniel, William, and Henry. The teacher asks, "What does the CPI measure?"

• Changes in GDP

• Changes in unemployment

• Changes in interest rates

Imagine you're in a classroom with Noah, Anika, and Lily, and your teacher asks: Why is low and stable inflation important for our economy's health?

• It increases government spending

• It raises interest rates

• It promotes economic growth

• It causes deflation

Imagine you're on a shopping spree with Abigail, Arjun, and Mia during a time of high inflation. What surprising thing happens to your money?

• Your purchasing power skyrockets, and you can buy more!

• The country's GDP takes a nosedive automatically!

• Your money seems to shrink in value, like magic!

• Your wages zoom past prices, making you richer!

Imagine you're on a shopping adventure with Evelyn and Daniel. You're trying to figure out how the Consumer Price Index (CPI) is calculated to see how much prices have changed over time. How would you calculate it?

• Real GDP ÷ Nominal GDP × 100

• Cost of Basket in Year 1 ÷ Cost of Basket in Year 2 × 100

• Cost of Basket in Year 2 ÷ Cost of Basket in Year 1 × 100

• GDP + Inflation Rate

Imagine you're at a party with Nora, Avery, and Zoe, and you're trying to figure out who among the guests is actively looking for a job but hasn't found one yet. What does this scenario represent in economic terms?

• The number of retired workers enjoying the party

• People not in the labor force, just chilling

• The percentage of people actively seeking work but not employed, like some guests here

• The total population without a job, including those not at the party