Macro Unit 2.1- GDP and Economic Growth

Mr. Clifford explains GDP, its importance, and how it measures a country's economic performance. GDP is the dollar value of all final goods and services produced within a country's borders in a given year. It consists of four components: consumption, investment, government spending, and net exports. The video also covers what is not included in GDP, such as intermediate goods, non-production transactions, and non-market activities.

What does GDP stand for and what does it measure?

• Gross Domestic Product; measures the number of goods produced

• Gross Domestic Product; measures the dollar value of final goods and services

• Gross Domestic Product; measures the number of intermediate goods

• Global Domestic Product; measures the number of services provided

Which of the following is NOT a component of GDP?

• Intermediate Goods

• Government Spending

• Investment

• Consumption

Why are intermediate goods not included in GDP calculations?

• They are not produced within the country's borders

• They are already included in the value of final goods

• They are not produced in a given year

• They are not measured in dollars

Which of the following transactions would be excluded from GDP?

• A new house purchase

• A new car purchase

• A used car sale

• A government contract for road construction

What is an example of a non-market activity that is not counted in GDP?

• A plumber fixing a neighbor's sink for free

• A plumber fixing a sink for a fee

• A government buying office supplies

• A company selling stocks