Question

You have just read an explanation of the figures you studying as the total dollar value of final goods and services produced within a country in one year after adjustment for inflation. What is this statement describing?

a. The definition of nominal GNP.

b. The definition of real GDP.

c. The definition of nominal GDP.

A macroeconomist would study

a. the impact of regulations in the banking sector in Florida.

b. household spending patterns in lower income groups.

c. economic policies designed to stimulate the country’s economy out of a recession.

Which of the following is included in GDP?

a. Cash paid to a babysitter that is not reported to the tax authorities.

b. Your friend changes your brake pads for free.

c. The payments for a chiropractor’s services.

Answer 1

a.

The nominal Gross national product (GNP) refers to the country domestic consumption of goods and service, and exported to foreign countries and government Expenditures. When we estimate, nominal GNP at market prices is referred as nominal Gross national product (GNP) . In other words, the nominal GNP reflects the value of output at the prices prevailing during the period in which output is produced.

b.

Real GDP is calculated by considering the effect of inflation. The real Gross domestic product (GDP) refers to the total value of goods and services produced with in a country during a specific period, by adjusting the changes in price.

The general formula for the calculation of Real (GDP) is:

c.

The nominal Gross domestic product (GDP) refers to the total value of goods and services produced with in a country during a specific period, by considering the prices of that same year.

The general formula for the calculation of Nominal (GDP) is:

1. A macroeconomist would study :

Answer: c. economic policies designed to stimulate the country’s economy out of a recession.

The reason is that, macroeconomist analyze the behavior of whole economy. Rather than study  individual / specific area of the  country’s economy.

2. Which of the following is included in GDP?

Answer: c. The payments for a chiropractor’s services.