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Questions and Answers
Which of the following is included in the components of GDP?
Which of the following is included in the components of GDP?
- Business profit (correct)
- Foreign investment
- Government debt
- Consumer saving
What does Per Capita GDP measure?
What does Per Capita GDP measure?
- The amount of government spending per person
- The total value of exports per person
- The total value of all products produced in a country
- The average income of the population (correct)
Which type of spending is considered 'investment spending' in GDP?
Which type of spending is considered 'investment spending' in GDP?
- Net exports
- Consumer spending
- Government spending
- Business spending (correct)
What does high consumer spending often indicate about the economy?
What does high consumer spending often indicate about the economy?
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Which of the following is included in government spending in GDP?
Which of the following is included in government spending in GDP?
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Study Notes
Components of GDP
- Consumption, Investment, Government Spending, and Net Exports are included in the components of GDP
Measuring GDP Per Capita
- Per Capita GDP measures the total output of a country's economy divided by its population, providing a rough estimate of the standard of living of citizens
Investment Spending
- Investment Spending refers to expenditure on capital goods, such as new housing, factories, and equipment, which is considered a key component of GDP
Consumer Spending
- High consumer spending often indicates a strong economy with low unemployment and high consumer confidence, as people are more likely to spend when they have a stable income and feel optimistic about the future
Government Spending
- Government Spending includes federal, state, and local government expenditures on goods and services, such as salaries, infrastructure, and social programs, which are included in GDP calculations
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