Gross Domestic Product

1. What does GDP stand for?

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

2. Which of the following is included in GDP?

A) Government spending
B) Income inequality
C) Stock market index
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 + Investment + Government Spending + Net Exports
D) GDP = Consumption x Investment x Government Spending x Net Exports

4. What does GDP per capita measure?

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

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

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

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

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

7. What does the GDP deflator measure?

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

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

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

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

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

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

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

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

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

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

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

13. 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 account for the difference between exports and imports, affecting the overall GDP
D) Net Exports represent the total government spending internationally

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

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

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

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

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

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

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