Understanding GDP

The video explains GDP, its components, and its significance in measuring economic growth and standard of living. It differentiates between nominal and real GDP, highlighting the importance of adjusting for inflation. GDP per capita is used to compare living standards across countries. The video also discusses how GDP data is crucial for decision-making by various stakeholders.

What does GDP stand for?

• Gross Development Product

• Gross Domestic Product

• Global Domestic Product

• General Domestic Product

Which of the following best describes GDP?

• A measure of a country's total imports

• A measure of a country's total exports

• A measure of a country's total population

• A measure of a country's total market value of all final goods and services produced

Which of the following is NOT considered a final good in GDP calculations?

• A car sold to a consumer

• A tire sold to a car manufacturer

• A haircut service

• A refrigerator sold to a household

Why are intermediate goods not included in GDP calculations?

• They are not valuable

• They are not produced within the country

• They are not sold in the market

• They are used in the production of final goods

What is the main difference between Nominal GDP and Real GDP?

• Real GDP includes only services, Nominal GDP includes goods

• Nominal GDP includes only goods, Real GDP includes services

• Real GDP is adjusted for inflation, Nominal GDP is not

• Nominal GDP is adjusted for inflation, Real GDP is not

What can cause an increase in Nominal GDP?

• A decrease in prices

• A decrease in the production of goods and services

• A decrease in population

• An increase in the production of goods and services

What does a 4.1% increase in real GDP indicate?

• The economy has experienced inflation

• The economy has remained stable

• The economy has grown

• The economy has shrunk

What is a common rule of thumb for identifying a recession?

• Two consecutive quarters of increasing real GDP

• Two consecutive quarters of declining real GDP

• One quarter of declining nominal GDP

• One quarter of increasing nominal GDP

How is GDP per capita calculated?

• By multiplying GDP by the population

• By dividing GDP by the population

• By dividing GDP by the number of goods produced

• By adding GDP to the population

If two countries have the same GDP, what can cause a difference in their standard of living?

• The amount of land they have

• The number of goods they produce

• The size of their populations

• The number of services they offer