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1. GDP is calculated by summing ________. consumption, investment, and exports o

ID: 2813635 • Letter: 1

Question

1. GDP is calculated by summing ________.

consumption, investment, and exports of all final goods and services produced within the borders of a given country during a specific period

the dollar value of all final goods and services produced within the borders of a given country during a specific period

government expenditures within the borders of a given country during a specific period

the quantity of all final goods and services produced within the borders of a given country during a specific period

2. Which of the following is NOT a component of gross domestic product (GDP)?

Consumption

Investments

Net exports

Taxes

3. The CPI is a measure of the overall cost of the goods and services bought by ________.

foreign visitors to the United States

a typical U.S. consumer

government agencies such as the Bureau of Labor Statistics

typical U.S. businesses

4. The real interest rate equals ________.

the inflation rate minus nominal interest rates

nominal interest rates minus the inflation rate

nominal interest rates plus the inflation rate

the actual interest rate over the period of the investment

Explanation / Answer

1)

the dollar value of all final goods and services produced within the borders of a given country during a specific period

GDP measures the total value of goods and services produced within a country during a specified period. It s calculated by summing investments, consumption, government expenditure and net exports

2)

Taxes

GDP does not include taxes

c)

typical U.S. consumer

CPI is a measure of inflation which includes goods and services bought by a typical consumer

4)

nominal interest rates minus the inflation rate

Real interest rate = Nominal interest rate - inflation rate. This is the actual return for an investor.