Test Your Knowledge!

Real Gross Domestic Product can best be described as:

Let’s say that an economy produces two final goods: cars and corn. During a particular year, it produces 5 cars priced at $20,000 per car, and 30,000 ears of corn each priced at $1. What is this country’s GDP?

Of the following which is included in the calculation of this year’s GDP?

An economist estimates that her country’s consumption expenditures this year amount to $15,000, gross private domestic investments are $5,000, and the government spends $10,000 on final goods and services. Exports amount to an estimated $3,000, and imports add up to $4,000. Production of intermediate goods and services are estimated to be $7,000 this year. According to the estimates of this economist, what is this country’s GDP?

Let’s say that this year a country produces 100 loaves of bread at $3 per loaf, and 2 cars priced at $500 per car. It also produces 10 bags of flour (used in the production of the bread) priced at $1 per bag, and 5 auto parts (used in the production of the cars) priced at $20 each. This country’s capital consumption allowance (depreciation) is $40 and the government collects $60 in taxes. Based on these numbers, what is this country’s Gross Domestic Product (GDP) and what is this country’s Net Domestic Product (NDP) for this year?

Let’s say that a country produces 20 smart phones each priced at $500 this year, and financial consultants provide a total of $6,000 in consulting services to clients this year. The country’s labor force is 40 people and its population is 80. Based on this data, what is this country’s per capita GDP?

Let’s say that a country has the following production numbers for these two final goods:
Year 1: 60 gallons of milk at $3 per gallon, and 2 bicycles at $300 per bicycle.
Year 2: 50 gallons of milk at $4 per gallon, and 3 bicycles at $400 per bicycle.
Using year 1 prices as the base year, what are this country’s nominal GDP and real GDP for years 1 and 2?

Let’s say that a country has the following data for this year:
income from wages = $3,000
income from interest = $500
income from rent = $1,500
income from profits = $800
capital consumption allowance (depreciation) = $200
indirect business taxes = $400
production of illegal goods and services = $900
production of intermediate goods = $600
government expenditures on social programs = $1,500
What is this country’s gross domestic product (GDP) and what is its net domestic product (NDP)?

According to Simon Kuznets and his environmental curve:

According to our text and data from the Bureau of Labor Statistics: