1. Real GDP is: a. the market value of all goods and services produced by U.S. f
ID: 1140665 • Letter: 1
Question
1. Real GDP is: a. the market value of all goods and services produced by U.S. firms, adjusted for price changes b. the sum of all environmentally harmful goods and services produced in the United States adjusted for price cha c. the market value of all final goods and services produced within the borders of a country in a year measured in today's prices d. the market value of all final goods and services produced within the borders of a country in a year adjusted for price changes 2. Nominal GDP is: a. the market value of all goods and services produced by U.S. firms, adjusted for price changes b. the sum of all environmentally harmful goods and services produced in the United States adjusted for price changes c. the market value of all final goods and services produced within the borders of a country in a year measured in today's prices d. the market value of all final goods and services produced within the borders of a country in a year adjusted for price changes 3. A growing economy is important in order to: a. compute real GDP b. reduce taxes c. ensure that everyone's standard of living is equal d. meet citizens' expectations for more goods and services per capita 4. If the Real GDP of Duoland grew by 3 percent last year, and the population of Duoland grew by 1 percent, the standard of living in Duoland: o a. improved b. worsened. c. remained the same d. cannot be determined from the information provided 5. In the United States, the trend growth rate of real GDP is about: a. 1.5 percent annually b. 3.0 percent annually c. 4.5 percent annually d. 6.0 percent annuallyExplanation / Answer
1) d) The market value of all final goods and services produced within the borders of a country in a year adjusted for price changes. It takes into account inflation or deflation.
It is thus calculated by using a base year's prices for goods and services, and the valuation is done for constant prices.
2) c) The market value of all final goods and services produced within the borders of a country in a year, measured in today's prices.
So this GDP is evaluated at current market prices and will include all changes in market prices during the current year due to inflation or deflation.
3) c) Ensure that everyone's standard of living is equal. This helps growing economy keep pace with a growing population.
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