Question : Which of the following is included in the calculation of GDP?
Option 1: Investment spending on stocks and bonds
Option 2: Government transfer payments
Option 3: Consumer spending
Option 4: Income earned by foreign nationals in the country
Correct Answer: Consumer spending
Solution : The correct answer is (c) Consumer spending.
Consumer spending is one of the components included in the calculation of Gross Domestic Product (GDP). GDP is a measure of the total value of all final goods and services produced within a country's borders during a specific period. It is commonly used as an indicator of a country's economic performance.
The components of GDP include:
a) Consumption spending: This represents the expenditure by households on goods and services, such as food, clothing, housing, healthcare, and entertainment.
b) Investment spending: This includes the spending on business investments, such as purchases of machinery, equipment, and structures, as well as spending on residential construction.
c) Government spending: This refers to the expenditure by the government on goods and services, such as public infrastructure, defense, education, and healthcare.
d) Net exports: This represents the difference between exports and imports. If a country's exports exceed its imports, it contributes positively to GDP, while if imports exceed exports, it has a negative impact on GDP.
Option 1: Investment spending on new factories
Option 2: Payments for government transfer programs
Option 3: Consumer spending on used cars
Option 1: Payments for government transfer programs
Option 2: Consumer spending on durable goods
Option 3: Income earned by foreign nationals in the country
Option 4: Capital gains
Option 2: Consumer spending on non-durable goods
Question : Which of the following is not included in the calculation of national income?
Option 1: Wages earned by foreign nationals in the country
Option 2: Interest income earned by domestic residents from foreign investments
Option 3: Profit earned by domestic firms in foreign countries
Option 4: Payments for goods and services in the underground economy
Question : Which of the following should be included in national income based on the income method?
Option 1: Capital gains from the sale of stocks
Option 2: Government subsidies to farmers
Option 3: Transfer payments to unemployed individuals
Option 4: Income earned by foreign investors in the country
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