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Questions and Answers
Which of the following is a component of national income?
Which of the following is a component of national income?
- Foreign Exchange Rate
- Consumer Price Index (CPI)
- Stock Market Index
- Gross Domestic Product (GDP) (correct)
What is the formula to calculate Gross Domestic Product (GDP)?
What is the formula to calculate Gross Domestic Product (GDP)?
- GDP = Consumption + Investment - Government Spending
- GDP = Consumption + Investment + Government Spending
- GDP = Consumption + Investment + Government Spending + Exports - Imports (correct)
- GDP = Consumption + Investment - Government Spending + Exports - Imports
Which of the following is a measure of the average price level of goods and services in an economy?
Which of the following is a measure of the average price level of goods and services in an economy?
- Consumer Price Index (CPI) (correct)
- Gross Domestic Product (GDP)
- Stock Market Index
- Foreign Exchange Rate
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Study Notes
Components of National Income
- National income includes compensation of employees, operating surplus, and mixed income.
Calculating Gross Domestic Product (GDP)
- The formula to calculate GDP is: GDP = Consumer Expenditure + Investment + Government Expenditure + (Exports - Imports)
Measure of Average Price Level
- Inflation rate or Consumer Price Index (CPI) is a measure of the average price level of goods and services in an economy.
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