Test Your KnowledgeGDP

Click on the letter choices to test your understanding

A B C

Question 1

• GDP is defined as:

•The amount by which the revenues of the Federal Government exceed its expenditures each year

A

•The total market value of all final goods and services produced within a country in a given period, usually a year

B

•The expenditures made in an economy on capital goods

C

Question 2

• GDP is measured by:

•The Bureau of Labor Statistics

A

•The Federal Reserve

B

•The Bureau of Economic Analysis (BEA)

C

Question 3

• GDP can be expressed by which formula?•C

+ I + G + (X-M)

A

•MV=PQ

B

•S=I + NX

C

Question 4

• The components of GDP are:

•Consumption, Investment, Government Spending, and Net Worth

A

•Consumption, Investment, Government spending, and Net Exports

B

•Government revenues minus government spending

C

Question 5

• The largest component of GDP is:

•Government spending

A

•Investment

B

•Consumption

C

Question 6

• Consumption refers to:

•Expenditures by households on goods and services

A

•Household spending on goods, but not services

B

•Spending by both households and government on goods and services

C

Question 7• GDP does not include:

•Financial transactions

A

•Services

B

•Construction of new buildings and homes

C

Question 8

• How does real GDP differ from nominal GDP?

•Nominal is the estimated GDP for the coming year, while real is the actual calculated rate

A

•Nominal GDP only counts consumption expenditures; Real GDP also counts investment and government spending

B

•Real GDP is nominal GDP adjusted for inflation

C

Question 9• Real GDP per capita is:

•The capital expenditures per person of a nation

A

•The average real output per person

B

•A good measure of a country’s standard of living

C

Question 10

• The Business Cycle:

•Is predictable and avoidable

A

•Accurately depicts how real life cycles behave

B

•Refers to economic upturns and downturns over time reflecting the cyclical nature of the economy

C

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