WorksheetsCheck for Understanding: Economic Indicator
Total questions: 5
Worksheet time: 10mins
The overall aim of the government is to:
Maximise profits
Maximise the standard of living of its citizens
Achieve the 4 macroeconomic aims
Provide public goods
Which of the following statements about GDP is accurate?
It includes the output contributions by foreigners and foreign-owned firms located in the country.
It includes the output contributions by nationals of the country that are located overseas.
It measures the value of all goods and services that are produced in a given time period.
It includes the value of all final goods and services that are produced in the country for the current year and previous years.
Which of the following statements about income level is inaccurate?
The higher the gini coefficient, the more unequal the income level is among the population.
A gini coefficient of 0 will indicate that everyone in the country earns the same level of income.
When real GDP per capita increases, the income level of everyone in the country increases.
When GDP increases by 10%, income level does not necessarily increase by 10%.
The following statements are possible limitations of using GDP as an economic indicator.
1) GDP does not take into account the illegal activities and unreported legal activities that generate income.
2) GDP figures can be inaccurate due to measurement problems.
3) GDP is not a comprehensive measure of standard of living.
Which of the following is true?
(3) only
(1) and (2)
(1) and (3)
All are true
Which of the following is the most comprehensive economic indicator to compare the standard of living between countries?
Real GDP per capita as it can compare the standard of living of the average citizen in different countries.
Real GDP per capita in USD as different countries have different currencies and we need a common currency for basis of comparison.
Real GDP per capita adjusted using Purchasing Power Parity (PPP) as it takes into account the difference in price levels between different countries.
Human Development Index (HDI) as it attempts to take into account the material and non-material aspects of SOL.
