Measuring nations income

Question 1

GDP

Answer 1

The market value of all final goods and services produced in a country in a given period of time.

Question 2

Components of GDP

Answer 2

1. Consumption
2. Investment
3. Government spending
4. Net exports

Question 3

Consumption

Answer 3

Spending by households on goods and services, with the exception of purchasing new housing.

Question 4

Investment

Answer 4

Spending on capitol equipment, inventories and structures, including household purchases of new housing.

Question 5

Government spending

Answer 5

Spending on goods and services, by local state and national governments.

Question 6

Net exports

Answer 6

Spending on domestically produced goods and services by foreigners minus spending on foreign goods by domestic residents.

Question 7

Real GDP

Answer 7

Measure of value of output in the economy which takes into account the changes in prices over time.

Question 8

Nominal GDP

Answer 8

The production of goods and services valued at current prices.

Question 9

GDP deflator

Answer 9

A measure of the price level calculated as the ratio of nominal to real times 100.

Question 10

Contributing to good life but left out of GDP

Answer 10

1. Leisure
2. Value of clean enviroment
3. Value of almost all activity that takes place outside of markets