Q: If nominal GDP in 2022 is $$22,000$$ and real GDP in 2022 is $$20,000$$, what is the GDP deflator for 2022?

$$GDP\ deflator = \frac{22,000}{20,000} \times 100 = 110$$

Question 1

Which of the following best describes Gross Domestic Product (GDP)?

Accepted Answer

The market value of all final goods and services produced in a country during a period of time, typically one year.

Question 2

Why are intermediate goods excluded from the calculation of GDP?

Accepted Answer

Because their value is already included in the value of final goods, and including them would result in double counting.

Question 3

Suppose a U.S. company produces cars in Mexico and sells them in the United States. How is this production counted in GDP and GNP?

Accepted Answer

It is included in U.S. GNP but not in U.S. GDP.

Question 4

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

Accepted Answer

The purchase of a used car.

Question 5

If nominal GDP in 2022 is $$22,000$$ and real GDP in 2022 is $$20,000$$, what is the GDP deflator for 2022?

Accepted Answer

$$GDP\ deflator = \frac{22,000}{20,000} 	imes 100 = 110$$

Question 6

Which of the following is an example of household production that is NOT included in GDP?

Accepted Answer

A parent cooking dinner for their family.

Question 7

Which component of GDP is typically the largest in the United States?

Accepted Answer

Consumption

Question 8

If a country’s GDP per capita increases, which of the following must be true?

Accepted Answer

Total GDP has increased faster than the population.

Question 9

Which of the following best explains why GDP is not a perfect measure of well-being?

Accepted Answer

GDP does not account for the value of leisure, environmental quality, or income distribution.

Question 10

During a recession, which of the following typically occurs?

Accepted Answer

Total production and total employment decrease.

Question 11

A country has the following data for a given year: Consumption = $$10,000$$, Investment = $$2,000$$, Government Purchases = $$3,000$$, Exports = $$1,000$$, Imports = $$1,500. $$What is the country’s GDP?

Accepted Answer

$$GDP = 10,000 + 2,000 + 3,000 + (1,000 - 1,500) = 14,500$$

Question 12

Which of the following would be counted as investment in the calculation of GDP?

Accepted Answer

A family purchasing a new home.

Question 13

If the GDP deflator rises from 110 to 121 between two years, what is the inflation rate over this period?

Accepted Answer

$$\frac{121 - 110}{110} 	imes 100 = 10\%$$

Question 14

Which of the following is an example of a transfer payment?

Accepted Answer

A government payment to a retired person through Social Security.

Question 15

Why might GDP growth overstate the increase in actual total production over long periods?

Accepted Answer

Because some household production is replaced by paid services, which are counted in GDP.

Question 16

Which of the following is true about the underground economy?

Accepted Answer

It is typically larger in developing countries due to high taxes and weak property rights.

Question 17

If real GDP increases but nominal GDP increases by a larger percentage, what does this indicate?

Accepted Answer

Prices have risen.

Question 18

Which of the following is subtracted when calculating net exports in GDP?

Accepted Answer

Imports

Question 19

Disposable personal income is best defined as:

Accepted Answer

Personal income minus personal tax payments.

chapter 8

Guida di studio - Domande di pratica

Study guide - Flashcard