Question

1. Gross Domestic Product (GDP)

1. Is the sum of all goods, both final and intermediate
2. Equals the total value of final goods and services produced in a year.
3. Equals the total wages paid in a year.
4. Is an obsolete economic indicator of inflation
5. Is a measure of government output

2. Gross Domestic Product (GDP) expressed in constant (real) dollars is called

1. Real GDP.
2. A price index.
3. Permanent income.
4. Capital accumulation.
5. Gross National Product (GNP).

3. The process of converting values expressed in current (nominal) dollars to values expressed in constant (real) dollars is called:

1. Devaluing.
2. Depreciating.
3. Depleting.
4. Deflating.
5. Double counting.

Answer 1

Explanation :

Question 1 . Gross domestic product is the sum total of the final good and services produced in an economy in an year.

So above option b ) is correct ,that is GDP Is equal to total value of final good & service produced in an year .

Option a) .GDP is sum total of both final and intermediate is incorrect because GDP include only final goods not intermediate good

Option c) equal to total wages paid in year is also incorrect because it is the part of calculating GDP not GDP itself .

Option d) GDP is an obsolete economic indicators of inflation is also incorrect because GDP only tells about total production in the economy ,not an inflation indicator.

Option e) GDP is a measure of government output is also incorrect , because GDP measure of both government and private output.

So,in question 1 option b) is correct.

Question 2 . Gross domestic product (GDP) expressed in constant or real Dollars is called Real GDP.

Option a) Real GDP is correct because of we measure GDP at constant price say constant or real dollar is called Real GDP.

Option b) a price index is incorrect because price index measure shows the relative price changes between base year and current year price.

Option c) permanent income is also incorrect because permanent income shows the 'current income and expected change in future income.'

Option d ) Capital accumulation is also incorrect because it measure the change in value of assets.

Option e) gross national product is also incorrect because it measure total production of goods and services owned by residents of the country in an year.

So,in question 2 correct option is a).

Question 3 . The process of converting value expressed in current (Nominal)dollars to expressed in constant(Real) dollars is called deflator .

Option d) Deflating is correct because it measure current (nominal)dollars to expressed in constant (Real)dollars.

Option a) Devaluing is incorrect option because Devaluing is decrease in value ,not converting .

Option b) depreciating is also incorrect because depreciating is decrease in value of assets measure in money

Option c) Depleting is also incorrect because it measure the cost of extraction of natural resources.

Option e) double counting is also incorrect because it is problem of counting more than once.

So, in question 3 correct option is D) .