Question 1

Explain the significance of the equation GDP = C + I + G + NX.

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Question 2

Explain why real gross domestic product (GDP)is preferred to nominal GDP as a measure of economic growth.

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Question 3

What does economics research have to say about the old adage that money can't buy happiness? Be specific.

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Question 4

A student had the following expenditures last month: rent-$500,food expense-$200,cost of a used textbook from the bookstore-$50,cost of new shoes-$100,and cost of gas for the car-$100.Which of these items are included in gross domestic product (GDP)?

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Question 5

The consumption component of gross domestic product (GDP)consists of both goods and services.The goods,in turn,can be broken down into durable and nondurable goods.Briefly explain what is included in each category,and why the distinction is significant.

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Question 6

Use an equation to explain how the growth of nominal gross domestic product (GDP),the growth of real GDP,and the change in price level are related.Give an example.

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Question 7

Identify three reasons why gross domestic product (GDP)is not a perfect measure of a nation's well-being.

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Question 8

Use the information in the table below to calculate the real 2015 gross domestic product (GDP),in 2009 dollars.Explain how the calculation is performed,and the reasoning behind it.

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Question 9

Explain why a country with a lower level of real gross domestic product (GDP)per capita might have a higher level of well-being in comparison to a country with a higher level of real GDP per capita.

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Question 10

The investment component of gross domestic product (GDP)can be broken down into three main categories.Identify these categories and briefly explain what is included in each category.

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Question 11

If gross domestic product (GDP)is increasing,is the country necessarily producing a larger quantity of goods and services? Explain.

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Question 12

Explain how the difference between nominal and real gross domestic product (GDP)arises,and draw a graph to illustrate the difference between them.

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Question 13

Explain why intermediate goods and used goods do not count in gross domestic product (GDP).

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Question 14

A country's nominal gross domestic product (GDP)has declined over the last year.Are the people in the country necessarily worse off,on average? Explain.

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Quiz 19: Introduction to Macroeconomics and Gross Domestic Product