GDP Calculation 4

Question 1

Which of the following would INCREASE U.S. GDP?

Accepted Answer

A U.S. factory produces and sells $50M in goods domestically

Answer

Newly produced and sold goods count in GDP; stock purchases, transfer payments, and used-good sales do not.

Question 2

Country X has wages of $500B, profits of $200B, rent of $80B, and net interest of $50B. Using the income approach, what is GDP (ignoring adjustments)?

Accepted Answer

$830B

Answer

Income approach GDP = Wages + Profits + Rent + Interest = $500B + $200B + $80B + $50B = $830B.

Question 3

If a country's exports are $300B and imports are $400B, net exports equal:

Accepted Answer

-$100B

Answer

Net exports (NX) = Exports - Imports = $300B - $400B = -$100B, indicating a trade deficit.

Question 4

Inventory investment is classified under which GDP component?

Accepted Answer

Gross Private Domestic Investment (I)

Answer

Changes in business inventories count as investment because they represent output produced but not yet sold.

Question 5

If nominal GDP is $15T and real GDP is $13T (base year = 2012), the GDP deflator is approximately:

Accepted Answer

115.4

Answer

GDP Deflator = (Nominal / Real) × 100 = ($15T / $13T) × 100 ≈ 115.4.

GDP - Gross Domestic Product Practice Test

GDP - Gross Domestic Product Practice Test

GDP Calculation 4