ECONOMICS
GDP
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Consumer spending
|
|
|
Government spending
|
|
|
Investment spending
|
|
|
Net exports of goods and services
|
Detailed explanation-1: -The four components of gross domestic product are personal consumption, business investment, government spending, and net exports.
Detailed explanation-2: -Answer and Explanation: Yes, firms’ capital equipment purchases can be included as the investment component of GDP.
Detailed explanation-3: -The spending approach to measuring GDP divides spending into four categories: consumption, investment, government purchases, and net exports. GDP is the total of spending on the four categories.
Detailed explanation-4: -In general, calculating real GDP is done by dividing nominal GDP by the GDP deflator (R). For example, if an economy’s prices have increased by 1% since the base year, the deflating number is 1.01. If nominal GDP was $1 million, then real GDP is calculated as $1, 000, 000 / 1.01, or $990, 099.