Question

1. If the estimate current dollar output is $3,978 billion and the relevant price index is 2.21, the constant dollar output is:

1. $1,800 billion.
2. $1,600 billion.
3. $2,921 billion.
4. $3,314 billion.
5. $3,756 billion.

2. The two methods of measuring the value of GDP are the

1. Input and output approaches.
2. Direct and indirect approaches.
3. Income and expenditures approaches.
4. Domestic and foreign approaches.
5. Household and business approaches.

3. The total amount of goods and services that could be produced if the economy were at full employment is called the

1. Business cycle.
2. Aggregate demand curve.
3. Aggregate supply curve.
4. Price level.
5. Potential GDP (or potential output).

Answer 1

1.

If the estimate current dollar output is $3,978 billion and the relevant price index is 2.21, the constant dollar output is:

Here Answer is

a. $1,800 billion.

Because when have to calculate current dollar output with relavant price index for getting the constant dollar output, that time have to divide

Current dollar output /Relevant price index = Constant dollar output

Here

$3978/2.21=$1800 Billion is Answer

2.

The two methods of measuring the value of GDP are the

Here Answer is

c. Income and expenditures approaches.

When we measuring GDP value that time there are two Approches/methods is there Income and Expenditure Approaches/methods ,have to Calculate income of Gross domestic product in inwards and outwards and also have to minus expenditures approaches from it, after we can get GDP Value.

3.

The total amount of goods and services that could be produced if the economy were at full employment is called the

Here Answer is

e. Potential GDP (or potential output).

When total amount of Goods and services could be produced (production) and economy were at full employment that time output should be Potential, it also called Potential output and It help to increase GDP or have potential of GDP, also here All sources used efficiently that why output is Potential.