Gross Domestic Product and National Income Quiz

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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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