Gross Domestic Product

1. What does GDP stand for?

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

2. Which of the following is included in GDP?

A) Income inequality
B) Stock market index
C) Government spending
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) Total sales of a country
B) GDP growth rate
C) Government budget surplus
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) Real GDP ignores exports, while nominal GDP includes them
D) Nominal GDP includes government spending, while real GDP does not

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

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

7. What does the GDP deflator measure?

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

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

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

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 accounts for inflation, providing a more accurate measure of economic output
C) Real GDP is used only for developed countries
D) Nominal GDP is always higher than Real GDP

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

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

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

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

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

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

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

A) Net Exports reflect the income earned from overseas investments
B) Net Exports have no impact on GDP
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) Time zones
B) Population size
C) Number of languages spoken
D) Geographical area

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

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

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

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

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