13. The method that measures GDP in relationship to the size of the population is called

a. GNP

b. worker GDP

c. GDP per person

d. capital GDP

ANSWER: C

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14. The components of GDP are

a. C + I + G

b. NX + G + C

c. C + G + NX

d. C + I + G + NX

ANSWER: D

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15. Suppose nominal GDP is $7700 and the GDP deflator is 110. Real GDP is

a. $7700

b. $7000

c. $847,000

d. $8470

ANSWER: B

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Short Answer

1. What are the components of gross domestic product (GDP)?

RESPONSE:

ANSWER: The components of GDP are: (1) consumption spending by households on goods

and services, with the exception of purchases of new housing; (2) Investment spending on capital equipment, inventories, and structures, including household purchases of new housing; (3) government purchases or spending on goods and services by the local, provincial, and federal levels governments; and (4) net exports which is spending on domestically produced goods and services by foreigners (exports) minus spending on foreign goods and services by domestic resident (imports).

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