14 Questions
What does gross domestic product (GDP) measure?
Total income and spending of a nation
How is GDP related to a nation’s total income and spending?
GDP measures the total income and spending for the entire nation
Which products are included in GDP?
Final goods intended for the end user
How is GDP corrected for inflation?
By adjusting for changes in market prices
Does GDP measure society’s well-being?
No, GDP does not account for important factors such as environmental quality or leisure time
What is excluded from GDP measurement?
Intermediate goods used in production
Which of the following is not included in the calculation of GDP?
Spending on used goods by households
If a country's GDP rises but net exports fall, what type of spending has increased?
Investment spending
In the context of GDP, what does 'NX' represent in the equation Y (GDP) = C + I + G + NX?
Net exports
If a household spends $500 on a used car, how does it affect the GDP?
GDP is not affected
Which component of GDP is affected when a business spends on capital equipment and structures?
Investment
What happens to GDP if a country's residents spend more on foreign goods than foreigners spend on domestically produced goods?
GDP decreases
If a government increases its spending on infrastructure projects, which component of GDP is directly affected?
Government purchases
Which of the following activities is not included in the calculation of GDP?
Purchasing stocks and bonds
Test your knowledge on measuring a nation's income, gross domestic product (GDP), its components, relationship to total income and spending, and correction for inflation. Explore if GDP accurately measures society's well-being.
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