The demand measure of GDP accounting adds together:

1. The demand measure of GDP accounting adds together:

a) Consumption, government purchases, wages and salaries, and trade balance

b) Wages and salaries, rent, interest, and profit.

c) Consumption, investment, government purchases, and trade balance.

d) Consumption, interest, government purchases, and trade balance.

Answer: (C)

2. Which of the following is not included in GDP?

a) Cash income paid to a day laborer that is not reported to the tax authorities

b) Payments for a dentists services

c) Replacement of brake pads on your seven-year-old vehicle

d) Fees for legal services provided by your lawyer

Answer: (A)

3. Which of the following does GDP not directly include?

a) The value of intermediate goods sold during a period

b)  The value of goods produced domestically and sold abroad

c) The value of services rendered during a period

d) The value of final goods and services produced, but not sold, during a period

Answer: (A)

4. What is the difference between nominal GDP and real GDP?

a) Real GDP adjusts for inflation.

b) Nominal GDP measures actual productivity.

c) Nominal GDP adjusts for inflation.

d) Real GDP excludes imports and exports.

Answer: (A)

5. Which is now the largest single component of the supply side of GDP, representing over half of GDP?

a) Services

b) Durable goods

c) Nondurable goods

d) Structures

Answer: (A)

Definition of GDP and expounding more about Nominal and Real GDP

GDP is a measure of national output and income for a provided economy of a nation. It is typically equivalent to the entire expenditures for all final services and goods generated within an economy in a particular period. Nominal GDP refers to the market value of services and goods generated in an economy, unadjusted for a rise in price of goods and services. Real GDP refers to the nominal GDP, accustomed for inflation to depict alterations in real output.