answer these 5 questions and choose the correct answer:- QUESTION 1 What is the
ID: 1137198 • Letter: A
Question
answer these 5 questions and choose the correct answer:-
QUESTION 1
What is the difference between nominal GDP and real GDP?
-Real GDP includes only the value of real, tangible goods produced, whereas nominal GDP includes also the value of intangible things, such as services.
-Real GDP includes only the value of goods and services sold within the national territory, whereas nominal GDP includes also the value of goods and services that are produced here but sold abroad.
-Real GDP is calculated using the income approach, whereas nominal GDP is calculated using the expenditure approach.
-Nominal GDP is calculated using current prices, whereas real GDP is calculated using constant prices (prices that prevailed in some baseperiod) so as to correct for inflation.
QUESTION 2
Which of the following statements is not true concerning gross domestic product (GDP)?
-GDP provides a complete and comprehensive measure of a country's quality of life or overall well-being.
-GDP represents the total value of all final goods and services produced within a given territory during a given period of time, usually one year.
-GDP does not include the value of net factor payments from abroad, such as wages paid to domestic residents for work performed in other countries or profits of domestic firms that are earned overseas.
-GDP includes the value of goods produced within our territory but sold to people in other countries.
QUESTION 3
In an open economy, if exports exceed imports, which of the following must also be true?
-There must be a government budget deficit.
-There must be a net financial outflow.
-There must be a net financial inflow.
-Both a and b, but not c
QUESTION 4
If consumers' earned income is unchanged, but part of their purchasing power is taken away by a tax increase, we would say there is ________.
-an increase in disposable income.
-unplanned disposable investment.
-a decrease in disposable income.
-a decrease in gross domestic product.
QUESTION 5
Guatemala needs 3 hours of labor to produce a TV and 12 to make a minivan. France requires 2 hours of labor to make a TV and 6 to make a minivan. Which of the following statements is true about the two countries' comparative advantages?
-Guatemala has comparative advantage in TV production and France has comparative advantage in producing minivans.
-France has comparative advantage in producing both TVs and minivans.
-France has comparative advantage in TVs and Guatemala in minivans.
-Neither country has comparative advantage in either product.
What is the difference between nominal GDP and real GDP?
-Real GDP includes only the value of real, tangible goods produced, whereas nominal GDP includes also the value of intangible things, such as services.
-Real GDP includes only the value of goods and services sold within the national territory, whereas nominal GDP includes also the value of goods and services that are produced here but sold abroad.
-Real GDP is calculated using the income approach, whereas nominal GDP is calculated using the expenditure approach.
-Nominal GDP is calculated using current prices, whereas real GDP is calculated using constant prices (prices that prevailed in some baseperiod) so as to correct for inflation.
QUESTION 2
Which of the following statements is not true concerning gross domestic product (GDP)?
-GDP provides a complete and comprehensive measure of a country's quality of life or overall well-being.
-GDP represents the total value of all final goods and services produced within a given territory during a given period of time, usually one year.
-GDP does not include the value of net factor payments from abroad, such as wages paid to domestic residents for work performed in other countries or profits of domestic firms that are earned overseas.
-GDP includes the value of goods produced within our territory but sold to people in other countries.
Explanation / Answer
1) Option 4 is the answer. The difference between them is that Nominal GDP is calculated using current prices, whereas Real GDP is calculated using constant prices (prices which prevailed in the base period) so as to correct for inflation. Thus, nominal GDP is not adjusted for inflation whereas real GDP is adjusted for inflation.
2) Option 1 is the answer as GDP is only an indicatior of final value of all goods and services produced within a domestic territory during a given period of time and does not indicates anything about quality of life or overall well being.
3) Option 3 is the answer. If exports exceeds imports then the net financial inflow will be there which means cash inflows will be more than cash outflows.
4) Option 3 is the answer as the tax levied, given income unchanged, will decrease the amount of disposable income with the consumers as they will have to pay the tax from their income.
5) Option 2 is the answer. Since France needs less hours to produce both TVs and minivans as compared to Guatemala, it has comparative advantage in producing both TVs and minivans.
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