Test Prep For AP® Courses
Which of the following transactions would be included in a country’s GDP?
- A person buys a used car from a friend.
- A manager buys coffee beans to make coffee to sell at her coffee shop.
- An investor buys stock in a foreign company.
- A person buys a house that was first sold 10 years ago.
- An automobile company exports cars to a foreign country.
The following table provides information on a country’s GDP and price deflator between 2009 and 2015. Answer the following questions based on this information.
|Year||Nominal GDP ($)||GDP deflator||Real GDP ($)|
- In which year did this country’s economy experience a recession? What was the growth rate in real GDP equal to in that year?
- In which year was the growth rate in nominal GDP the highest?
- In which year was the growth rate in the average price level the lowest?
Which of the following statements is a criticism of GDP as a measure of a country’s standard of living?
- GDP cannot factor in changes in prices in its measurement of total production.
- GDP cannot measure the actual change in production.
- GDP does not factor in the production of intermediate goods.
- GDP may increase as a result of bad things like crime or war.
- GDP does not factor in the value of financial assets.