B5 - Economic Measures/Indicators

Question 1

How is GDP measured under the expenditure approach?

Answer 1

GICE
Government spending
Investment (private domestic)
Consumption (personal)
Exports (net)

Question 2

How is GDP measured under the income approach?

Answer 2

I PIRATED
Income of proprietors
Profits of corporations
Interest (net)
Rental income
Adjustments for other items
Taxes
Employee compensation
Depreciation

Question 3

How is net domestic product (NDP) calculated?

Answer 3

GDP - depreciation

Question 4

How is gross national product (GNP) defined?

Answer 4

Market value of all goods and services produced by residents of a given country

Question 5

How is net national product (NNP) defined?

Answer 5

GNP - economic depreciation

Question 6

What are the three factors that make up natural unemployment?

Answer 6

Frictional, structural, seasonal unemployment

Question 7

What is the difference between CPI and PPI?

Answer 7

CPI is consumer price index and PPI is producer price index

Question 8

What does the Phillips Curve explain?

Answer 8

The inverse relationship between inflation and unemployment

Question 9

How is real interest rate calculated?

Answer 9

Nominal interest rate (real interest rate + expected inflation) - inflation rate