Economic Growth Quiz

What is economic growth typically measured by?

• Percentage change in real GDP per annum

• Increase in nominal GDP

• Decrease in inflation rate

• Shift in consumer preferences

What does the shift of PPF indicate?

• Economic growth

• Economic decline

• Inflation increase

• Deflation

Why is Gross National Income (GNI) increasingly used rather than GDP?

• It is easier to calculate

• It includes only domestic production

• It accounts for the size of remittances and aid

• It excludes overseas investments

What does Gross National Product (GNP) measure?

• Only domestic goods and services

• Goods and services produced by citizens both domestically and overseas

• Only overseas investments

• Only the services sector

What is the purpose of calculating real GDP figures?

• To include all economic activities

• To account for inflation differences

• To focus on nominal GDP

• To ignore overseas investments

What is the Big Mac Index used for?

• Comparing the cost of the Big Mac throughout the world

• Measuring inflation rates

• Calculating GDP

• Determining exchange rates

What is a problem with using GDP to compare the standard of living?

• Inaccuracy of data

• High inflation rates

• Low interest rates

• Stable exchange rates

What is an example of a transfer payment?

• Government taxes given to unemployed people

• Interest paid on loans

• Income from employment

• Profits from businesses

What is one argument for using Purchasing Power Parity in GDP comparisons?

• It simplifies calculations

• It accounts for cost of living differences

• It is universally accepted

• It is easier to understand

What happens when businesses find their costs have risen?

• They decrease prices

• They maintain prices

• They increase prices to maintain profit margins

• They stop production