Calculating Nominal GDP Quiz
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Questions and Answers

What was the nominal GDP in 2021?

  • $255,750 (correct)
  • $190,250
  • $1
  • $134.4

What is Real GDP?

  • $190,250 (correct)
  • $1
  • $255,750
  • $134.4

How is the GDP deflator calculated?

  • (Nominal GDP) - (Real GDP)
  • 100 x Real GDP/Nominal GDP
  • (Real GDP) - (Nominal GDP)
  • 100 x (Nominal GDP)/(Real GDP) (correct)

According to Robert Kennedy's criticism, what does GDP fail to measure?

<p>Devotion to country (C)</p> Signup and view all the answers

What does GDP not value according to the text?

<p>The quality of the environment (C)</p> Signup and view all the answers

What can a large GDP enable a country to afford?

<p>Better schools and healthcare (C)</p> Signup and view all the answers

What does the GDP deflator measure?

<p>The current level of prices relative to the level of prices in the base year (C)</p> Signup and view all the answers

Which year had the highest GDP deflator based on the data provided?

<p>2021 (A)</p> Signup and view all the answers

What is the formula for calculating the GDP deflator?

<p>$100 \times \frac{Nominal<del>GDP}{Real</del>GDP}$ (A)</p> Signup and view all the answers

What does nominal GDP represent?

<p>GDP without accounting for inflation (B)</p> Signup and view all the answers

In 2020, what was the inflation rate based on the provided data?

<p>11.1% (D)</p> Signup and view all the answers

If nominal GDP in a year is $15,000 and real GDP is $12,000, what would be the GDP deflator for that year according to the formula?

<p>$125.0 (C)</p> Signup and view all the answers

What is the key difference between nominal GDP and real GDP?

<p>Nominal GDP values output using current prices, while real GDP values output using base year prices. (D)</p> Signup and view all the answers

In the context of calculating nominal GDP, what does the formula $P imes Q$ represent?

<p>Total spending on the good or service (D)</p> Signup and view all the answers

How does real GDP differ from nominal GDP in terms of inflation correction?

<p>Real GDP adjusts for inflation, while nominal GDP does not. (A)</p> Signup and view all the answers

What does the change in real GDP reflect in terms of economic analysis?

<p>Change in quantities only (D)</p> Signup and view all the answers

Why is nominal GDP valuable for assessing economic performance?

<p>It provides a measure of output using current market prices. (A)</p> Signup and view all the answers

How does real GDP help in understanding the true growth of an economy?

<p>By adjusting for inflation and focusing on changes in quantities produced (A)</p> Signup and view all the answers

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