Economic Activity and Growth Concepts

What is the primary measure of economic activity in a country?

• Gross National Income (GNI)

• Disposable Income

• Gross Domestic Product (GDP)

• Net National Product (NNP)

What does nominal GDP represent?

• The total income of citizens

• The value adjusted for inflation

• The value of goods/services produced in a year

• The total savings in an economy

Which of the following is an injection in the circular flow of income?

• Increased imports

• Increased savings

• Increased taxation

• Increased government spending

What is a leakage in the circular flow of income?

• Increased government spending

• Increased savings

• Increased investment

• Increased exports

What does the expenditure approach to calculating GDP include?

• Only exports and imports

• Consumption, investment, government spending, and net exports

• Only government spending

• Only consumption and investment

Which of the following is NOT included in the income approach to calculating national income?

• Wages from labor

• Rent from land

• Interest from capital

• Government spending

What is the formula for calculating nominal GDP using the expenditure approach?

• GDP = C + I - G + (X - M)

• GDP = C + I + G + (X - M)

• GDP = C - I + G + (X + M)

• GDP = C + I + G - (X + M)

What does GNI stand for?

• Gross National Income

• Gross National Investment

• Gross Net Income

• Gross National Indicator

What is the difference between nominal GDP and real GDP?

• Nominal GDP includes only domestic production

• Real GDP is adjusted for inflation, nominal GDP is not

• Both are the same

• Nominal GDP is adjusted for inflation, real GDP is not

What is the GDP deflator used for?

• To calculate GNI

• To measure economic growth

• To convert nominal GDP to real GDP

• To measure inflation