GDP

Question 1

GDP Def

Answer 1

Market Value of all final goods. Calculates total economic wealth of a country over the year. C+I+G+(X-M)

Question 2

Final goods +EX

Answer 2

Goods ready to be consumed; EX shoes, couch, phone

Question 3

Intermediate goods +EX+ relationship with GDP calculations

Answer 3

Goods used during fabrication process excluded from GDP calculations; EX materials, metal, paint

Question 4

Nominal GDP + Problem + Solution

Answer 4

Value of all final goods based on the prices during the time of production. Problem: Does not take in account price rises that cause GDP rises (Inflation) Solution: Use real GDP

Question 5

Real GDP

Answer 5

Value of all final goods based on prices existing in given base year

Question 6

C is the largest component of GDP

Answer 6

True

Question 7

GDP is based on existing prices called

Answer 7

Nominal GDP