Gross Domestic Product

1. What does GDP stand for?

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

2. Which of the following is included in GDP?

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

3. What is the formula for calculating GDP?

A) GDP = Consumption x Investment x Government Spending x Net Exports
B) GDP = Consumption + Investment + Government Spending + Net Exports
C) GDP = Consumption + Investment + Government Spending - 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) Nominal GDP includes government spending, while real GDP does not
B) Real GDP ignores exports, while nominal GDP includes them
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) China
B) United States
C) Japan
D) Germany

7. What does the GDP deflator measure?

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

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 fluctuates due to changes in exchange rates
C) It ignores the services sector
D) It includes all forms of government spending

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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