Understanding GDP

What does GDP stand for and what does it measure?

• Global Development Plan; measures economic policies

• Gross Domestic Product; measures a country's population growth

• Global Domestic Product; measures international trade

• Gross Domestic Product; measures a country's total economic output

How does nominal GDP differ from real GDP?

• Both nominal and real GDP are adjusted for inflation

• Nominal GDP includes price changes, real GDP does not

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

• Real GDP includes price changes, nominal GDP does not

Why is real GDP considered a better measure of economic growth?

• It includes all price changes

• It accounts for inflation, providing a clearer picture of growth

• It measures only the services sector

• It is calculated more frequently than nominal GDP

If nominal GDP grew by 10% and inflation was 10%, what is the real GDP growth?

• 10%

• 20%

• 0%

• 5%

Which of the following is NOT a use of GDP?

• Measuring economic growth

• Formulating economic policies

• Assessing environmental health

• Comparing international economies

How can GDP data influence policy decisions?

• By deciding immigration policies

• By setting minimum wage levels

• By guiding interest rate adjustments

• By determining tax rates

What does GDP per capita indicate?

• The average income of the wealthiest citizens

• The total population of a country

• The average economic output per person

• The total GDP of a country

Which of the following is a limitation of GDP?

• It includes non-market activities

• It measures only the manufacturing sector

• It measures environmental sustainability

• It does not account for income inequality

Why doesn't GDP measure non-market activities?

• They are not officially recorded

• They are accounted for in real GDP

• They are too small to impact the economy

• They are included in the informal economy

What aspect of well-being is NOT captured by GDP?

• Income distribution

• Quality of life

• Environmental costs

• Economic output