Gross Domestic Product

1. What does GDP stand for?

A) General Development Plan
B) Global Domestic Production
C) Gross Domestic Product
D) Government Debt Projection

2. Which of the following is included in GDP?

A) Stock market index
B) Income inequality
C) Government spending
D) Savings rate

3. What is the formula for calculating GDP?

A) GDP = Consumption + Investment + Government Spending - Net Exports
B) GDP = Consumption + Investment - Government Spending + Net Exports
C) GDP = Consumption x Investment x Government Spending x Net Exports
D) GDP = Consumption + Investment + Government Spending + Net Exports

4. What does GDP per capita measure?

A) GDP growth rate
B) Government budget surplus
C) Total sales of a country
D) Average economic output per person in a country

5. What is the difference between real GDP and nominal GDP?

A) Real GDP adjusts for inflation, while nominal GDP does not
B) All GDP calculations are the same
C) Nominal GDP includes government spending, while real GDP does not
D) Real GDP ignores exports, while nominal GDP includes them

6. Which country has the largest GDP in the world as of 2021?

A) China
B) Japan
C) Germany
D) United States

7. What could cause an increase in GDP but not lead to economic growth?

A) Decrease in government spending
B) Inflation
C) Drop in consumer spending
D) Rise in unemployment rate

8. What is the significance of calculating Real GDP as opposed to Nominal GDP?

A) Nominal GDP includes government expenditures, making it higher
B) Nominal GDP is always higher than Real GDP
C) Real GDP accounts for inflation, providing a more accurate measure of economic output
D) Real GDP is used only for developed countries

9. What is the main limitation of using GDP as a measure of economic well-being?

A) It includes all forms of government spending
B) It ignores the services sector
C) It fluctuates due to changes in exchange rates
D) It does not account for distribution of income

10. Which term is used to describe a period of negative economic growth for two consecutive quarters?

A) Depression
B) Stagflation
C) Recession
D) Inflation

11. How often is GDP typically reported in most countries?

A) Biannually
B) Annually
C) Monthly
D) Quarterly

12. What is the significance of Net Exports in GDP calculation?

A) Net Exports have no impact on GDP
B) Net Exports reflect the income earned from overseas investments
C) Net Exports represent the total government spending internationally
D) Net Exports account for the difference between exports and imports, affecting the overall GDP

13. What does the expenditure approach to GDP calculation measure?

A) Total value of all goods and services produced
B) Total spending on final goods and services
C) Total income earned in an economy
D) Total imports and exports

14. What does the GDP deflator measure?

A) Income inequality
B) Import prices
C) The unemployment rate
D) The ratio of nominal GDP to real GDP

15. GDP can be used to compare the economic performance of countries, but what must be taken into consideration when doing so?

A) Population size
B) Geographical area
C) Time zones
D) Number of languages spoken

16. What is the relationship between GDP and standard of living?

A) Higher GDP always means higher standard of living
B) Standard of living is not relevant to GDP
C) GDP provides an indication of a country's economic output, but standard of living considers factors like health, education, and income distribution
D) GDP directly determines the standard of living

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