Podcast
Questions and Answers
Which of the following scenarios would cause nominal GDP to increase, but not necessarily real GDP?
Which of the following scenarios would cause nominal GDP to increase, but not necessarily real GDP?
- A decrease in the overall price level of goods and services.
- An increase in the production of goods and services while prices remain constant.
- A technological advancement that leads to more efficient production.
- A significant increase in the overall price level of goods and services. (correct)
In national income accounting, what is the key difference between GDP and GNP?
In national income accounting, what is the key difference between GDP and GNP?
- GDP is calculated using the expenditure approach, while GNP uses the income approach.
- GDP includes intermediate goods, while GNP only includes final goods.
- GDP accounts for environmental degradation, while GNP does not.
- GDP measures production within a country's borders, while GNP measures production by a country's residents. (correct)
How does the exclusion of non-market activities, such as household production, affect GDP as a measure of economic well-being?
How does the exclusion of non-market activities, such as household production, affect GDP as a measure of economic well-being?
- It leads to an underestimation of the total economic production and welfare. (correct)
- It leads to an overestimation of economic activity.
- It results in a more accurate reflection of societal welfare.
- It has no significant impact on the measurement of economic well-being.
If a country's nominal GDP increased by 5% and its GDP deflator increased by 2%, approximately what was the percentage change in real GDP?
If a country's nominal GDP increased by 5% and its GDP deflator increased by 2%, approximately what was the percentage change in real GDP?
Which component of the expenditure approach to calculating GDP is most affected by increased international trade?
Which component of the expenditure approach to calculating GDP is most affected by increased international trade?
Using the income approach, how would an increase in corporate profits and a decrease in employee wages impact the calculation of GDP?
Using the income approach, how would an increase in corporate profits and a decrease in employee wages impact the calculation of GDP?
In the production approach to calculating GDP, what adjustments are made to avoid double counting?
In the production approach to calculating GDP, what adjustments are made to avoid double counting?
If a significant portion of a country's GDP is generated by foreign-owned companies operating within its borders, what does this imply about the relationship between GDP and GNP?
If a significant portion of a country's GDP is generated by foreign-owned companies operating within its borders, what does this imply about the relationship between GDP and GNP?
Which of the following is NOT a limitation of using GDP as a sole measure of a country's economic well-being?
Which of the following is NOT a limitation of using GDP as a sole measure of a country's economic well-being?
How does a substantial increase in the underground economy (e.g., black market activities) impact the accuracy of GDP as a measure of economic activity?
How does a substantial increase in the underground economy (e.g., black market activities) impact the accuracy of GDP as a measure of economic activity?
How might increased leisure time, without a change in production of goods and services, affect GDP and overall societal well-being?
How might increased leisure time, without a change in production of goods and services, affect GDP and overall societal well-being?
If government increases spending on infrastructure projects, how would this directly impact GDP as calculated by the expenditure approach?
If government increases spending on infrastructure projects, how would this directly impact GDP as calculated by the expenditure approach?
A country experiences rapid economic growth due to increased exports. How would this likely affect the relationship between its GDP and GNP?
A country experiences rapid economic growth due to increased exports. How would this likely affect the relationship between its GDP and GNP?
What is the primary reason for using real GDP instead of nominal GDP when comparing economic growth rates across different years?
What is the primary reason for using real GDP instead of nominal GDP when comparing economic growth rates across different years?
How would an increase in the production of intermediate goods that are used domestically affect a country's GDP?
How would an increase in the production of intermediate goods that are used domestically affect a country's GDP?
Which of the following scenarios would lead to the GDP deflator being greater than 100?
Which of the following scenarios would lead to the GDP deflator being greater than 100?
If a country experiences a significant increase in remittances from its citizens working abroad, how will this affect its GDP and GNP?
If a country experiences a significant increase in remittances from its citizens working abroad, how will this affect its GDP and GNP?
A country implements stricter environmental regulations, leading to a decrease in industrial output but an improvement in air and water quality. How would this likely be reflected in GDP?
A country implements stricter environmental regulations, leading to a decrease in industrial output but an improvement in air and water quality. How would this likely be reflected in GDP?
How does the purchase of a newly constructed house affect GDP?
How does the purchase of a newly constructed house affect GDP?
Which of the following transactions is included in the calculation of GDP?
Which of the following transactions is included in the calculation of GDP?
Flashcards
Economics
Economics
The study of how societies allocate scarce resources to satisfy unlimited wants and needs.
Microeconomics
Microeconomics
Focuses on individual economic agents like households and firms.
Macroeconomics
Macroeconomics
Examines the economy as a whole, focusing on aggregate variables.
National Income
National Income
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Gross Domestic Product (GDP)
Gross Domestic Product (GDP)
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Nominal GDP
Nominal GDP
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Real GDP
Real GDP
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Expenditure Approach
Expenditure Approach
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Income Approach
Income Approach
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Production Approach
Production Approach
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GDP Formula (Expenditure Approach)
GDP Formula (Expenditure Approach)
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GDP Deflator
GDP Deflator
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Gross National Product (GNP)
Gross National Product (GNP)
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National Income Accounting
National Income Accounting
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Inflation
Inflation
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Net factor income from abroad
Net factor income from abroad
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Study Notes
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