Gross Domestic Product (GDP)

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Gross Domestic Product (GDP) is best defined as:

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The total value of all goods and services produced by a country in a year.

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How can a country increase its real GDP?

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By increasing the amount of finished goods and services produced inside the country.

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Why is GDP used as a measurement?

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It broadly shows overall domestic production and functions as a comprehensive scorecard of a country’s economic health.

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BMW has an assembly plant for the X3, X4, and X5 in South Carolina. The production of U.S.-made BMW's contributes to which GDP?

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It is added to the U.S. GDP.

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What is Real GDP?

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The value of all goods and services produced in the domestic economy, corrected for inflation or deflation.

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Which of the following is included in Germany’s GDP?
- BMWs produced in a German-owned factory in South Carolina
- Lumber produced and used in the construction of housing in Germany
- The value of the stocks sold on the German stock exchange, the Frankfurt Stock Exchange
- Wind turbines produced by the American-owned company GE at a factory in Berlin, Germany

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Wind turbines produced by the American-owned company GE at a factory in Berlin, Germany

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In calculating the U.S. gross domestic product, which category has the largest dollar amount? Options: Consumer spending, Rental payments, Net exports of goods and services, Government purchases of goods and services

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Consumer spending

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In comparing GDP data over a period of years, a difference between nominal and real GDP may arise because:

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the price level may change over time (inflation or deflation).

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In a recession, what do you expect to happen to consumer and business spending, and as a result, GDP?

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DECREASE

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Which of the following is NOT included in the calculation of GDP?
The value of a new car produced and sold in a country,
The value of a homemade birthday cake made by a parent for their child,
The value of a new house built in a country,
The value of a service provided by a dentist in a country

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The value of a homemade birthday cake made by a parent for their child