Question

Foreign direct investment includes portfolio investment. True False

Economic growth is measured as:

total output per year divided by the inflation rate.

the annual percentage change in real GDP.

total nominal GDP at the end of each year.

the percentage change in population growth per year.

the quarterly percentage change in nominal GDP.

According to the expenditures approach, gross domestic product represents the sum of consumption spending, government spending, net exports, and net investment.True False

Answer 1

Solution :- (1)

The Statement that Foreign direct investment includes portfolio investment is False as

Foreign direct investment is building or purchasing businesses and their associated infrastructure in a foreign country while portfolio investment includes every investment either it is in Country or Outside country So we can say that Portfolio investment includes Foreign Direct investment but  Foreign direct investment does not includes portfolio investment.

Solution :- (2)

The Correct Answer is (B) that is the annual percentage change in real GDP.

Economic growth refers to the increase in inflation adjusted market value of goods that can be produced by an economy over the period . Economic growth  is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP

Solution :- (3)

The Statement given that

According to the expenditures approach, gross domestic product represents the sum of consumption spending, government spending, net exports, and net investment is True

As as per Expenditure Approach ,

Gross Domestic Product = consumption spending + government spending + net exports + net investment