Gross Domestic Product and National Income Quiz
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Gross Domestic Product and National Income Quiz

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Questions and Answers

What does gross domestic product (GDP) measure?

  • Total expenditure on imports and exports
  • Market value of intermediate goods
  • Total income and spending of a nation (correct)
  • Total government expenditure

    • How is GDP related to a nation’s total income and spending?

  • GDP measures the overall expenditure of imports and exports
  • GDP reflects only the total income of the government
  • GDP is unrelated to a nation’s total income and spending
  • GDP measures the total income and spending for the entire nation (correct)

    • Which products are included in GDP?

  • Final goods intended for the end user (correct)
  • All products, including intermediate goods
  • Only homegrown products
  • Illegal drugs and black market products

    • How is GDP corrected for inflation?

    <p>By adjusting for changes in market prices</p> Signup and view all the answers

    Does GDP measure society’s well-being?

    <p>No, GDP does not account for important factors such as environmental quality or leisure time</p> Signup and view all the answers

    What is excluded from GDP measurement?

    <p>Intermediate goods used in production</p> Signup and view all the answers

    Which of the following is not included in the calculation of GDP?

    <p>Spending on used goods by households</p> Signup and view all the answers

    If a country's GDP rises but net exports fall, what type of spending has increased?

    <p>Investment spending</p> Signup and view all the answers

    In the context of GDP, what does 'NX' represent in the equation Y (GDP) = C + I + G + NX?

    <p>Net exports</p> Signup and view all the answers

    If a household spends $500 on a used car, how does it affect the GDP?

    <p>GDP is not affected</p> Signup and view all the answers

    Which component of GDP is affected when a business spends on capital equipment and structures?

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

    What happens to GDP if a country's residents spend more on foreign goods than foreigners spend on domestically produced goods?

    <p>GDP decreases</p> Signup and view all the answers

    If a government increases its spending on infrastructure projects, which component of GDP is directly affected?

    <p>Government purchases</p> Signup and view all the answers

    Which of the following activities is not included in the calculation of GDP?

    <p>Purchasing stocks and bonds</p> Signup and view all the answers

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