GDP and Gross National Product (GNP)

Description: This quiz focuses on the concepts of Gross Domestic Product (GDP) and Gross National Product (GNP). It aims to assess your understanding of these economic indicators and their significance in measuring the economic performance of a country.
Number of Questions: 15
Created by:
Tags: gdp gnp macroeconomics economic indicators
Attempted 0/15 Correct 0 Score 0

Which of the following is NOT a component of GDP?

  1. Consumption

  2. Investment

  3. Government Spending

  4. Net Exports


Correct Option: D
Explanation:

Net exports are not included in GDP because they represent the difference between exports and imports, which is already accounted for in the other components of GDP.

GDP measures the value of all:

  1. Goods and services produced within a country's borders

  2. Goods and services produced by a country's citizens

  3. Goods and services consumed within a country's borders

  4. Goods and services exported from a country


Correct Option: A
Explanation:

GDP measures the total value of all goods and services produced within a country's borders, regardless of who owns the factors of production.

GNP is calculated by:

  1. Adding net factor income from abroad to GDP

  2. Subtracting net factor income from abroad from GDP

  3. Multiplying GDP by the exchange rate

  4. Dividing GDP by the exchange rate


Correct Option: A
Explanation:

GNP is calculated by adding net factor income from abroad to GDP. Net factor income from abroad represents the difference between the income earned by a country's residents from foreign assets and the income earned by foreign residents from domestic assets.

Which of the following is NOT a determinant of a country's GDP?

  1. Labor force

  2. Capital stock

  3. Technology

  4. Natural resources


Correct Option: D
Explanation:

Natural resources are not a direct determinant of a country's GDP. However, they can indirectly affect GDP by influencing the availability and cost of factors of production.

GDP per capita is calculated by:

  1. Dividing GDP by the population

  2. Multiplying GDP by the population

  3. Subtracting the population from GDP

  4. Adding the population to GDP


Correct Option: A
Explanation:

GDP per capita is calculated by dividing GDP by the population. It represents the average income of each person in a country.

Which of the following is NOT a potential problem with using GDP as a measure of economic well-being?

  1. It does not account for income distribution

  2. It does not account for environmental externalities

  3. It does not account for leisure time

  4. It does not account for government spending


Correct Option: D
Explanation:

Government spending is included in GDP, so it is not a potential problem with using GDP as a measure of economic well-being.

Which of the following is NOT a component of GNP?

  1. Consumption

  2. Investment

  3. Government Spending

  4. Net Exports


Correct Option: A
Explanation:

Consumption is not a component of GNP because it is already included in GDP.

GNP measures the value of all:

  1. Goods and services produced within a country's borders

  2. Goods and services produced by a country's citizens

  3. Goods and services consumed within a country's borders

  4. Goods and services exported from a country


Correct Option: B
Explanation:

GNP measures the total value of all goods and services produced by a country's citizens, regardless of where the production takes place.

GDP is calculated by:

  1. Adding net factor income from abroad to GNP

  2. Subtracting net factor income from abroad from GNP

  3. Multiplying GNP by the exchange rate

  4. Dividing GNP by the exchange rate


Correct Option: B
Explanation:

GDP is calculated by subtracting net factor income from abroad from GNP. Net factor income from abroad represents the difference between the income earned by a country's residents from foreign assets and the income earned by foreign residents from domestic assets.

Which of the following is NOT a determinant of a country's GNP?

  1. Labor force

  2. Capital stock

  3. Technology

  4. Exchange rate


Correct Option: D
Explanation:

Exchange rate is not a direct determinant of a country's GNP. However, it can indirectly affect GNP by influencing the competitiveness of a country's exports and imports.

GNP per capita is calculated by:

  1. Dividing GNP by the population

  2. Multiplying GNP by the population

  3. Subtracting the population from GNP

  4. Adding the population to GNP


Correct Option: A
Explanation:

GNP per capita is calculated by dividing GNP by the population. It represents the average income of each person in a country.

Which of the following is NOT a potential problem with using GNP as a measure of economic well-being?

  1. It does not account for income distribution

  2. It does not account for environmental externalities

  3. It does not account for leisure time

  4. It does not account for net exports


Correct Option: D
Explanation:

Net exports are included in GNP, so it is not a potential problem with using GNP as a measure of economic well-being.

Which of the following is NOT a component of GDP?

  1. Consumption

  2. Investment

  3. Government Spending

  4. Exports


Correct Option: D
Explanation:

Exports are not a component of GDP because they are already included in consumption, investment, and government spending.

GDP measures the value of all:

  1. Goods and services produced within a country's borders

  2. Goods and services produced by a country's citizens

  3. Goods and services consumed within a country's borders

  4. Goods and services imported into a country


Correct Option: A
Explanation:

GDP measures the total value of all goods and services produced within a country's borders, regardless of who owns the factors of production.

GNP is calculated by:

  1. Adding net factor income from abroad to GDP

  2. Subtracting net factor income from abroad from GDP

  3. Multiplying GDP by the exchange rate

  4. Dividing GDP by the exchange rate


Correct Option: A
Explanation:

GNP is calculated by adding net factor income from abroad to GDP. Net factor income from abroad represents the difference between the income earned by a country's residents from foreign assets and the income earned by foreign residents from domestic assets.

- Hide questions