ECONOMICS (CBSE/UGC NET)

ECONOMICS

GDP

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Remember:there are four “pieces” of GDP:C, I, G, Nx).When the government spends money to build new public schools, which piece is affected?

A	C
B	I
C	G
D	(Ex-Im)

Explanation:

Detailed explanation-1: -When using the expenditures approach to calculating GDP the components are consumption, investment, government spending, exports, and imports.

Detailed explanation-2: -The four components of gross domestic product are personal consumption, business investment, government spending, and net exports. 1 That tells you what a country is good at producing. GDP is the country’s total economic output for each year. It’s equivalent to what is being spent in that economy.

Detailed explanation-3: -GDP or Gross Domestic Product is the monetary value of all goods and services produced within a country’s geographical boundaries during a given period. It is an indicator of the ‘size of an economy’.

Detailed explanation-4: -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).

There is 1 question to complete.