Question 1

What is subtracted from GDP to calculate net domestic product (NDP)?

Accepted Answer

A

Question 2

Gross domestic product is the total market value of all:

Accepted Answer

Gross domestic product (GDP) is the total market value of all final goods and services produced in a time period within a country. Intermediate goods, which are goods used in the production of other goods, are not counted in GDP to avoid double counting. The inclusion of services in GDP is also important because they contribute to the overall economic activity within a country. Option A is similar to the correct answer but includes intermediate goods, while option C excludes services. Option D is incorrect because it includes goods and services produced by citizens working overseas, which would be included in the gross national product (GNP) calculation instead.

Question 3

Gross national income (GNI)is defined as the value of final goods and services produced:

Accepted Answer

GNI is a measure of the total income generated by a country's residents both domestically and internationally. It includes income earned by Australian residents even if they are working outside of Australia. Therefore, the best choice is C.

Question 4

To calculate GDP using the value-added method, we add up:

Accepted Answer

The value-added method involves adding up the value added by each firm involved in the production of final goods and services. This means that we only include the value added at each stage of production, rather than including the full market value of final goods and services or intermediate goods and services.

Question 5

How are 'intermediate goods' treated in the calculation of GDP?

Accepted Answer

Intermediate goods are not counted separately in the calculation of GDP. Their value is included as part of the value of the final good they are a part of. This avoids double-counting, as the final good already includes the value of the intermediate goods used to produce it.

Question 6

Which of the following is not one of the four main policy concerns of Australian macroeconomic policy?

Accepted Answer

While the circular-flow of income is an important concept in macroeconomics, it is not one of the main policy concerns of Australian macroeconomic policy. The four main policy concerns are the rate of economic growth, the unemployment rate, the rate of inflation, and external stability (which relates to the balance of payments and exchange rates).

Question 7

What is a 'final good'?

Accepted Answer

A final good is a good that is purchased by an end consumer for consumption, and is not used as an input in the production process of other goods or services.

Question 8

Which of the following is included in the gross domestic product for an economy in a given year?

Accepted Answer

Only the value of final goods produced in that year is included in the gross domestic product. Intermediate goods are not counted since they are already included in the value of the final goods. Used goods are also not counted since they were already counted when they were first produced as new goods.

Question 9

Which of the following transactions would be included in GDP?

Accepted Answer

The purchase of pencils is included in GDP because it is a new good that contributes to the current year's production and consumption. Purchases of used goods, financial products, or non-productive assets like art do not contribute to the current year's production and are therefore not included in GDP calculations.

Question 10

How is total production in the economy measured?

Accepted Answer

Total production in the economy is measured as the market value of all final goods and services produced in the economy, which is known as Gross Domestic Product (GDP). It is the most common measure used to determine the size and growth of an economy. B, C, and D are incorrect because while they may be components of GDP, they do not represent the total value of all goods and services produced in the economy.

Question 11

An example of a 'final good' would be:

Accepted Answer

A final good is a product that is sold to the end-user or consumer for their consumption or use. The soy latte drink sold by Starbucks to a student is a final good because it is sold directly to the end-user for consumption.

Options A and B are intermediate goods because they are sold to Starbucks for further processing into a final product. Option D is a raw material that must be further processed into a final product, making it an intermediate good as well.

Question 12

A truck that is produced in 2018 will not be sold until 2019. According to the definition of GDP, in which year's GDP should it be counted?

Accepted Answer

GDP measures the value of goods and services produced within a country in a specific period. The truck, produced in 2018, contributes to the GDP of 2018, the year it was produced, regardless of when it is sold.

Question 13

A company named Home Depot sells new and used doors to contractors who build new homes. Home Depot also sells new and used doors to homeowners. Which of the following would be counted in GDP?

Accepted Answer

The sale of a new door to a homeowner is counted in GDP because it is a final good sold to the end user. Used goods and intermediate goods (like doors for new homes) are not included in GDP calculations.

Question 14

Gross domestic product in the economy is measured by the:

Accepted Answer

GDP is the market value of all final goods and services produced within a country in a given period of time (usually a year). Therefore, the best choice is B, which refers to the market value of all final goods and services produced in the economy. Choices A, C, and D are incorrect because they do not take into account the market value of final goods and services, which is a crucial component of GDP measurement.

Question 15

Macroeconomics involves the economic issues of:

Accepted Answer

Macroeconomics deals with the overall performance of the economy, including issues such as unemployment, inflation, and economic growth. It focuses on the policies and strategies that can be implemented to achieve full employment, stable prices, and long-term economic growth, rather than the decisions of individual firms within a specific industry.

Question 16

An example of an 'intermediate good' would be:

Accepted Answer

An intermediate good is a good that is used in the production of a final good or service. In this case, the bread is being used by a cafe to make a sandwich which is the final product that they sell to their customers.

Question 17

Which of the following transactions would be included in the official calculation of GDP?

Accepted Answer

Purchasing a new smartphone is a final good transaction and is included in GDP calculations as it reflects current economic activity.

Question 18

An example of an 'intermediate good' would be:

Accepted Answer

An intermediate good is a product that is used to produce another product or service. In this case, the tyres on a new car are an intermediate good because they are used in the production of the final product, the car. Thus, the best choice is C. The other options are not intermediate goods as they are either final products (A and B) or simply a replacement part for a final product (D).

Question 19

Which of the following issues would be considered as part of the study of macroeconomics?

Accepted Answer

Macroeconomics deals with the study of the economy as a whole, including issues such as inflation, economic growth, and unemployment rate. Therefore, the unemployment rate is the only option listed that would be considered part of macroeconomics.

Question 20

'GDP' is:

Accepted Answer

All of these options are correct. GDP is the value of all final goods and services produced in a country during a given time period, as well as the sum of consumption, investment, government spending and net exports during a given time period. Additionally, GDP measures the sum of the market value of final production, rather than the quantity of production, during a given time period.

Quiz 4: Gdp: Measuring Total Production, Income and Economic Growth

What is subtracted from GDP to calculate net domestic product (NDP) ?

Gross domestic product is the total market value of all:

Gross national income (GNI) is defined as the value of final goods and services produced:

To calculate GDP using the value-added method, we add up:

How are 'intermediate goods' treated in the calculation of GDP?

Which of the following is not one of the four main policy concerns of Australian macroeconomic policy?

What is a 'final good'?

Which of the following is included in the gross domestic product for an economy in a given year?

Which of the following transactions would be included in GDP?

How is total production in the economy measured?

An example of a 'final good' would be:

A truck that is produced in 2018 will not be sold until 2019. According to the definition of GDP, in which year's GDP should it be counted?

A company named Home Depot sells new and used doors to contractors who build new homes. Home Depot also sells new and used doors to homeowners. Which of the following would be counted in GDP?

Gross domestic product in the economy is measured by the:

Macroeconomics involves the economic issues of:

An example of an 'intermediate good' would be:

Which of the following transactions would be included in the official calculation of GDP?

An example of an 'intermediate good' would be:

Which of the following issues would be considered as part of the study of macroeconomics?

'GDP' is: