Economic Growth Indicators and Inflation Causes
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Questions and Answers

What is the formula to calculate GDP?

  • Sum of all wages, rent, interest, and profits
  • Total National Income - Sales Taxes - Depreciation
  • Total National Income + Sales Taxes + Depreciation + Net Foreign Factor Income (correct)
  • Total National Income + Depreciation

    • What is Depreciation according to the economy?

  • The difference between the total income that a country’s citizens and companies generate in foreign countries
  • Consumer taxes imposed by the government on the sales of goods and services
  • The cost allocated to a tangible asset over its useful life (correct)
  • The total income that a country’s citizens and companies generate in foreign countries

    • What is included in the calculation of Total National Income?

  • Interest income, Unincorporated business net income, and Rental income
  • Wages and benefits paid to employees, Corporate and government profits before taxes, Interest income, Unincorporated business net income, and Rental income (correct)
  • Indirect business taxes, and subsidies
  • Wages and benefits paid to employees, and Corporate profits before taxes

    • What is the Expenditure approach in measuring GDP?

    <p>The sum of the final uses of goods and services measured in purchasers' prices</p> Signup and view all the answers

    What happens when a good is produced and unsold?

    <p>The standard accounting convention is that the producer has bought the good from themselves</p> Signup and view all the answers

    What is Net Foreign Factor Income?

    <p>The difference between the total income that a country’s citizens and companies generate in foreign countries, versus the total income foreign citizens and companies generate in the domestic country</p> Signup and view all the answers

    What does the abbreviation 'GDP' stand for in economic terms?

    <p>Gross Domestic Product</p> Signup and view all the answers

    Which component of GDP includes government expenditures on goods and services?

    <p>G</p> Signup and view all the answers

    What does the 'I' component of GDP represent?

    <p>Investment in capital equipment and housing</p> Signup and view all the answers

    What distinguishes the expenditure approach from the income approach in GDP calculation?

    <p>The starting point of calculations</p> Signup and view all the answers

    How is unemployment defined in economic terms?

    <p>Individuals of working age who are able to work but are not working currently</p> Signup and view all the answers

    What is the working age range for some countries when considering unemployment?

    <p>16 years or more</p> Signup and view all the answers

    What is the GDP deflator used for?

    <p>Comparing gross domestic products of different years by adjusting for inflation or deflation</p> Signup and view all the answers

    How is the real GDP growth rate calculated?

    <p>(Real GDP in year n) − (Real GDP in year n − 1)</p> Signup and view all the answers

    What does GDP Per Capita represent?

    <p>The average per capita income, living standards, and worker productivity</p> Signup and view all the answers

    What does the actual GDP measure?

    <p>The current GDP of a country</p> Signup and view all the answers

    How is the potential GDP calculated?

    <p>By calculating the GDP under ideal conditions</p> Signup and view all the answers

    Which approach is used to calculate GDP by reflecting the value added during production processes?

    <p>Production (Value Added) approach</p> Signup and view all the answers

    How is Gross Value Added (GVA) calculated?

    <p>By subtracting intermediate consumption from the gross value of output</p> Signup and view all the answers

    What does the Value of Output include?

    <p>Both total sales and changes in the inventory</p> Signup and view all the answers

    How do economic activities (industries) contribute to calculating GDP?

    <p>By classifying them into sectors and calculating the output using specific methods</p> Signup and view all the answers

    Which term refers to the Gross Domestic Income (GDI) according to the text?

    <p>Primary incomes generated by goods and services</p> Signup and view all the answers

    What is the relationship between Gross Domestic Product (GDP) and Gross Value Added (GVA)?

    <p>GVA is equal to GDP</p> Signup and view all the answers

    How is Gross Value of Output calculated at factor cost?

    <p>By deducting each sector's intermediate consumption from the gross output value</p> Signup and view all the answers

    What are the different situations that can be described by a specific economic term?

    <p>Inflation</p> Signup and view all the answers

    How is Gross Domestic Product (GDP) categorized?

    <p>By the monetary value of goods and services produced within a country</p> Signup and view all the answers

    What is measured by Consumer Spending indicators?

    <p>How much capital consumers feed back into the economy</p> Signup and view all the answers

    What is indicated by Industry Performance indicators?

    <p>GDP by industry</p> Signup and view all the answers

    What is indicated by International Trade and Investment indicators?

    <p>Balance of payments between trade partners</p> Signup and view all the answers

    What do Special indicators include?

    <p>Distribution of personal income and global value chains</p> Signup and view all the answers

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