Worksheet: Macroeconomics Topics 5–8 (Grade 12)

Topic 5. Using the definition of Gross Domestic Product (GDP), choose the item that would be counted in a country’s GDP as a product or service produced within its borders during the current period.

• A new car assembled this year in a domestic factory and sold to a household

• A used car sold between private parties this year

• Flour purchased by a bakery to make bread

• Unpaid household childcare provided by a parent

Topic 5. Why is GDP measured at market value sometimes problematic as a measure of total production and welfare? Select the best reason.

• It excludes non‑market and underground production, causing output to be understated

• It always double‑counts intermediate goods

• It ignores price changes entirely

• It treats imports as domestic production by default

Topic 5. Which of the following is a final good rather than an intermediate good for GDP accounting?

• Flour sold to a bakery

• Steel sold to an automobile manufacturer

• A computer chip sold to a smartphone producer

• Flour sold to a household for home baking

Topic 5. What does “produced in” mean for inclusion in a nation’s GDP? Choose the transaction that is counted in U.S. GDP.

• Profits earned by a U.S. company’s factory operating in another country

• Wages paid to U.S. citizens working abroad

• Output produced by a foreign‑owned factory located in the United States

• Interest earned by U.S. investors on foreign bonds

Topic 5. Which expression represents the expenditure approach to measuring GDP and shows how output, expenditure, and income are interrelated?

• C + I + G + NX

• Wages + rent + interest + profit

• Sum of value added across all firms

• Money supply × velocity

Topic 5. Which of the following is a commonly cited weakness of GDP as a measure of welfare?

• GDP adjusts for the underground economy

• GDP reflects the distribution of income across households

• GDP does not account for depreciation of capital

• GDP includes the value of leisure

Topic 5. Which adjustment helps overcome the problems of price changes when comparing output over time?

• Real GDP

• Nominal GDP

• Per capita GDP

• Seasonally adjusted GDP

Topic 5. Which description best characterizes the general pattern of GDP in the United States over time?

• Long‑run growth with cyclical expansions and recessions

• A constant level with no fluctuations

• A persistent long‑run decline with brief upturns

• Random changes with no trend

Topic 5. During the medieval period, economic performance was not uniformly poor as generally perceived. Which comparative statement aligns with this view?

• Europe uniformly outpaced both China and the Muslim world in growth throughout the medieval period

• China and parts of the Muslim world experienced notable advances, while Europe’s growth was slower early on

• All regions experienced identical growth patterns in the medieval period

• Economic activity virtually ceased in all regions during the medieval period

Topic 5. What made the Industrial Revolution different from previous economic changes and helped drive U.S. growth?

• A shift to mechanization, factory production, and new technologies

• A return to feudal land systems and reduced trade

• A widespread decline in productivity and innovation

• An exclusive focus on agriculture over manufacturing