GDP Basics
What does GDP stand for?
Gross Domestic Product
Which type of GDP is adjusted for inflation?
Real GDP
Which part of GDP measures household spending?
Consumption
True or False: GDP measures happiness and well-being.
False
Which country currently has the largest GDP in the world?
The United States
GDP measures the total value of what?
Goods and services produced in a country
Which GDP uses current prices?
Nominal GDP
What does “I” stand for in the GDP equation?
Investment
Name one thing GDP does NOT measure.
Environment, unpaid work, happiness, inequality, etc.
Which country has the second-largest GDP (as of recent years)?
China
True or False: GDP includes goods made outside the country.
False
If prices rise but output stays the same, what happens to nominal GDP?
It increases
What does “G” represent in the GDP formula?
Government spending
Why might a high GDP not mean high quality of life?
It doesn’t account for inequality or living conditions
If a country’s GDP per capita is low, what might that indicate?
Lower average income or living standards
What are the two of the four components of GDP?
Consumption, Investment, Government Spending, Net Exports
Why do economists prefer using real GDP for comparisons over time?
It shows true growth without inflation’s effects
If a country imports more than it exports, are net exports positive or negative?
Negative
What is GDP per capita?
It measures economic output per person
What type of economy tends to have higher GDP per capita — developed or developing?
Developed economies
What is the formula used to calculate GDP?
GDP = C + I + G + (X – M)
What term describes a long-term rise in the price level of goods and services?
Inflation
What does NX stand for in the GDP formula?
Net Exports (Exports – Imports)
If GDP grows but pollution also increases, what might that suggest?
Economic growth without environmental sustainability
Name one factor that can cause GDP to increase.
More production, higher investment, more spending, better technology, etc.