QUESTION 1 The equation for Nominal GDP using the expenditures approach is - Wages + Interest +...

Question:

QUESTION 1 The equation for Nominal GDP using the expenditures approach is

- Wages + Interest + Rent + Profit

- Consumption +Investment + Government Purchases+Exports-Imports

- Nominal GDP divided by the price index

- This year's output valued at base year prices

QUESTION 2 The equation for Nominal GDP using the income approach is

- Wages+ Interest+ Rent+Profit

- Wages + Investment + Rent + Profit

- Wages+Imports+Rent+ Profit

- Consumption +Interest + Government Purchases+ Imports-Exports

QUESTION 3 The Investment component of GDP consists of. (Choose all that apply)

- new private-sector construction

- purchases of machinery and equipment by firms

- changes in inventory (changes in the stock of finished goods that didn't sell).

- purchases of stocks, bonds, and other financial assets

Gross Domestic Product:

Gross Domestic Product (GDP) is an economic aspect widely applicable in economics by economists to evaluate and determine the value of end products and services at a certain time within an economy. It is vital for illustrating the health and size of an economy. Thus an upsurge in the real GDP signifies a healthy economy and vice versa.

Answer and Explanation:

he equation for Nominal GDP using the expenditures approach is

The answer is:- Consumption +Investment + Government Purchases+Exports-Imports The correct choice is Consumption+ Investment+ Government purchases+ Exports -Imports.

The expenditure approach uses the aggregate money spent within a nation to determine the total output. Thus, GDP (Y) takes into consideration Consumption (C), Investment (I), Government outlays (G), and Exports minus Imports (X-M).

Therefore, GDP using the expenditure approach is illustrated as:

Y= C + I + G + (X-M).

The correct choice is Wages + Interest + Rent + Profit

QUESTION 2 The equation for Nominal GDP using the income approach is

The correct choice is - Wages+ Interest+ Rent+Profit

The income approach to obtain GDP applies incomes received by individuals or corporations within a country. Therefore, it focuses on factors such as compensations or wages, rent or royalties, interest earned, and business profits or cash flows.

Therefore, the total GDP using the income approach is obtained as:

GDP = Wages + Total Interest + Rent and Royalties + Business Profits.

The correct choices include purchases of machinery and equipment by firms, new private-sector construction, and change in inventory.

QUESTION 3 The Investment component of GDP consists of. (Choose all that apply)

The correct choices are:

- new private-sector construction

- purchases of machinery and equipment by firms

- changes in inventory (changes in the stock of finished goods that didn't sell).

Investment as a component of GDP illustrates products purchased by firms to increase the total goods and services produced. It also includes households acquiring newly constructed homes or houses. Change in inventory, which includes in the GDP investment, shows products not yet sold to consumers regarding the business upsurge or down surge. However, GDP investment fails to consider the purchases of bonds or financial assets.


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Overview of the Gross Domestic Product

from CLEP Social Sciences and History: Study Guide & Test Prep

Chapter 59 / Lesson 2
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