1.The market value of all final goods and services in an economy produced by resources owned by people of that economy is:

a.personal income

b.national income

c.gross national product

d.gross domestic product

2.Which of the following activities would be calculated as part of GDP accounts?

a.drug trafficking

b.money laundry

c.prostitution

d.purchasing plastic surgery

3.Which of the following expenditures would be included in GDP for this year?

a.the purchase of a new car.

b.the purchase of a new tire by General Motors for a new car.

c.the purchase of a used car.

d.all of these would be included.

4.Gross private domestic investment includes business:

a.purchases of capital goods, all new construction, and purchases of consumer durable goods.

b.purchases of capital goods, all new construction, and inventory investment.

c.purchases of capital goods, all new commercial construction, and inventory

investment.

d.purchases of capital goods, all new residential construction, and inventory

investment.

5.Gross Domestic Product data

National income account

Billions of

dollars

Personal consumption expenditures (C) $500

Exports (X) 65

Government spending (G) 300

Imports (M) 15

Gross private domestic investment (I) 65

As shown in the table :

Net exports are:

a.$50 billion

b.$15 billion.

c.$35 billion.

d.$65 billion.

Using the expenditure approach in the table, gross domestic product (GDP) is:

a.$600 billion.

b.$100 billion.

c.$500 billion.

d.$915 billion.

Discussion Questions

1.Which of the components of GDP must increase if we are to experience greater rates of economic growth?

2. What is the difference between Nominal and Real GDP?

3. If the illegal drug trade was legalized what would happen to GDP?

4.What would happen to GDP if a significant number of housewives who were previously staying home to care for their children began taking jobs and placing their children in day-care? Would the nation's well-being necessarily be better off?

5.Determine the effect on GDP for the following.

a. Consumption increases.

b. Government spending falls.

6.Please use this table to answer the following questions:

Year GDP Price Deflator Nominal GDP Real GDP

1 93 $90 billion

2 $85 billion $85 billion

3 120 $75 billion

a.Compute the missing numbers from the table

b.What is the economic growth rate for year 3?

c.Which year is the base year?

d.Which year (s) experienced recession?

7.Key Annual Indicators 2018-2019

Land Area

Total Population

Median Age

Life Expectancy at Birth

Sex Ration

Doctors per 10,000 Population

Private Cars per 10,000 Population

Home Ownership Rate

Mobile Phone Subscribers per 1,000 Population

Average Household Size

Gross Domestic Product at Current Market Prices

Gross Domestic Product at 2015 Market Prices

Economic Growth Rate

Per Capita GDP

Labour Force Participation Rate

Unemployment Rate

Inflation Rate