FREE GDP Concept and Indicators Questions and Answers

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Transfer payments refer to payments that are made ________.

Correct! Wrong!

Explanation:
Transfer payments are payments made by the government to individuals, businesses, or other levels of government without receiving any goods or services in return. They are typically made for social welfare programs, subsidies, or other forms of assistance.

Which of the following statements is true about Nominal Gross Domestic Product?

Correct! Wrong!

Explanation:
Nominal Gross Domestic Product (GDP) is calculated by considering the current prices of goods and services without adjusting for inflation.

Which sector in the economy is the largest contributor to the Gross National Product?

Correct! Wrong!

Explanation:
The tertiary sector, also known as the service sector, includes industries such as retail, banking, transportation, education, and healthcare. It is often the largest contributor to the Gross National Product (GNP) in many modern economies, reflecting the importance of services in economic activity and growth.

Which of the following is added in calculating Gross Domestic Product?

Correct! Wrong!

Explanation:
The construction of a new house adds value to the economy and is included in the calculation of Gross Domestic Product (GDP).

Which of the following is not a method to calculate Gross Domestic Product?

Correct! Wrong!

"Explanation:
The correct answer is "Diminishing cost method" because it's not a recognized method for calculating GDP."

The net value of Gross Domestic Product after deducting depreciation from it is _______.

Correct! Wrong!

Explanation:
Net Domestic Product (NDP) is the net value of Gross Domestic Product (GDP) after deducting depreciation from it. It reflects the value of goods and services produced within a country's borders after accounting for the depreciation of capital goods.

The average income of a country is known as _________.

Correct! Wrong!

Explanation:
Per Capita Income refers to the average income earned per person in a given area, such as a country or region. It is calculated by dividing the total income of a country by its total population.

Which of the following is a part of the Gross National Product (GNP)?

Correct! Wrong!

Explanation:
Gross National Product (GNP) includes exports, imports, and the money earned by a country's residents abroad.

Which of the following is a limitation of the Gross Domestic Product?

Correct! Wrong!

Explanation:
Each of the options listed represents a limitation of the Gross Domestic Product (GDP). While GDP is a widely used measure of economic activity, it does have limitations. It doesn't account for factors like the sustainability of growth, the impact on human health and the environment, and non-market transactions, which can provide an incomplete picture of a nation's overall well-being and economic health.

While using expenditure to calculate Gross Domestic Product, consumption ___________.

Correct! Wrong!

Explanation:
When using expenditure to calculate Gross Domestic Product (GDP), consumption includes spending on durable goods (like cars and appliances), non-durable goods (like food and clothing), and services (like healthcare and entertainment).

The total income from economic activities across the country within a year is known as ________.

Correct! Wrong!

Explanation:
National Income refers to the total income earned by residents of a country from various economic activities within a specified period, typically a year.

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