GDP & Inflation Review

Which of the following is NOT part of GDP:

• a new car that is sold

• a teacher working in the classroom

• a used TV on Craigslist

• no answer

Who is most likely to be hurt by inflation?

• someone who borrowed money
• a retiree on a fixed income
• a business owner
• the U.S. government

In which part of the GDP calculation does this fit?

The US military spends $5 billion on five new helicopters.

• Consumer spending

• Government spending

• Investment spending

• Net exports

Which is the following is included in GDP?

• an intermediate good

• a service produced and used in another country

• a fish that you catch and eat yourself

• a fish that you buy at a store

In which part of the GDP calculation does this fit?

The local taxi service purchases new vehicles for the

company.

• Consumer spending

• Government spending

• Investment spending

• Net exports

What is GDP per Capita?

• GDP divided by population

• GDP minus inflation

• GDP plus inflation

• A measure of economic inflation

Inflation reduced people's purchasing power because

• the same amount of money buys ore goods and services

• the same amount of money buys fewer goods and services

• the market basket has to be changed every year

• there is not enough money in the economy

In which part of the GDP calculation does this fit?

You spend $15 at AMC to see the latest Avengers movie.

• Consumer spending

• Government spending

• Investment spending

• Net exports

Business spending on physical capital, new homes, and inventories is counted in which component of GDP?

• consumption

• investment

• imports-exports

• government spending

What is nominal GDP?

• The value of the economy in a given year

• The value of the economy minus inflation

• The value of the economy plus inflation

• THe value of the economy adjusted for inflation