GDP Components and Calculations

The video tutorial explains the expenditure approach to calculating GDP, which includes personal consumption expenditures, gross private investment, government purchases, and net exports. Each component is detailed, highlighting the importance of new goods and services in GDP calculations. The tutorial emphasizes the equation GDP = C + I + G + (X - M), where C is personal consumption, I is investment, G is government spending, and X and M are exports and imports, respectively.

Which of the following is NOT a component of GDP in the expenditure approach?

• Personal consumption expenditures

• Gross private investment

• Government purchases

• Net imports

What type of spending is included in personal consumption expenditures?

• Spending on new and used goods

• Spending on new consumer goods and services

• Spending on capital goods

• Spending on government services

Why are thrift store purchases not included in GDP calculations?

• They are government purchases

• They were already counted when sold as new

• They are considered imports

• They are not considered consumer goods

What does gross private investment measure?

• Spending by the government on infrastructure

• Spending by households on consumer goods

• Spending on imported goods

• Spending by businesses on capital goods

Which of the following is included in gross private investment?

• Government spending on highways

• Purchases of used machinery

• Purchases of new homes by households

• Spending on imported goods

What is included in government purchases?

• Spending by businesses on capital goods

• Spending by all levels of government on goods and services

• Spending on exports

• Spending by households on consumer goods

Which of the following is NOT considered a government purchase?

• Constructing a new school

• Buying imported goods

• Purchasing military equipment

• Building a new highway

What are net exports composed of?

• Only exports

• Only imports

• The sum of exports and imports

• The difference between exports and imports

How are imports treated in the GDP equation?

• They are considered part of government purchases

• They are not included in GDP

• They are subtracted from GDP

• They are added to GDP

Which of the following best describes exports in the context of GDP?

• Goods and services imported from other countries

• Goods and services produced domestically and sold abroad

• Goods and services produced abroad and sold domestically

• Goods and services produced and consumed domestically