ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Consumption (Consumer)
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Investment (Business)
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Government Spending
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Exports-Imports
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Detailed explanation-1: -The price index can then be calculated by dividing the nominal GDP by the real GDP. So if gasoline was $3 per gallon in 2010, then the price index = 3 / 2 × 100 =150.
Detailed explanation-2: -Understanding Gross Domestic Product (GDP) The calculation of a country’s GDP encompasses all private and public consumption, government outlays, investments, additions to private inventories, paid-in construction costs, and the foreign balance of trade. (Exports are added to the value and imports are subtracted).
Detailed explanation-3: -The major items included in the calculation of GDP include business investment, net exports, individual consumptions, and government expenditures. The GDP calculation does not transfer payments, purchases, and sales of used goods, intermediate goods, etc.
Detailed explanation-4: -GDP = private consumption + gross private investment + government investment + government spending + (exports – imports). GDP is usually calculated by the national statistical agency of the country following the international standard.