GDP, Inflation, and Unemployment Quest

Dollar value of all final goods and services produced within a country in a given year. 

• depreciation
• durable goods
• GDP
• price level

Why is real GDP more accurate than nominal GDP?

• It's adjusted for price changes
• It's adjusted for depreciation
• It includes unpaid and paid work.
• It includes unrecorded business.

What is one limitation of GDP?

• It does not include intermediate goods.
• It does not show how the economy is doing over time.
• It does not include non-durable goods 
• It does not measure health and happiness

Nicole was laid off as a waitress when her restaurant closed down due to the slow economy. Nicole is considered

• cyclically unemployed
• frictionally unemployed
• seasonally unemployed
• not in the labor force

Honda has an assembly plant for Civics in Ohio. The production of U.S.-made Civics is

• added to U.S. GDP. 
• added to Japan's GDP because Honda is a Japanese company. 
• not included in either the U.S. or Japanese GDP. 
• added to U.S. GDP only if the Civic is sold in the United States in the year it is produced. 

Investment is defined as the purchase of

• any financial asset only.
• additions to inventories only.
• financial assets and inventories only.
• the purchase of new capital goods and additions to inventories. 

When a company buys new computers for their business, what part of the GDP equation does this count as? 

• Consumption
• Investments
• Imports
• Exports

GDP that is adjusted for inflation

• real GDP
• nominal GDP
• price level
• net national product

GDP that is NOT adjusted for inflation

• real GDP
• nominal GDP
• price level
• net national product

In the United States, the largest component of GDP is made up of 

• consumer spending
• business investment
• government spending  
• exports