AP Macroeconomics : Other GDP Gross Domestic Product
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Example Questions
Example Question #1 : Tables
Each of the following is included in the gross domestic product EXCEPT _________.
Consumption
Net Exports
Transfer payments
Government Expenditures
Transfer payments
To calculate the GDP, we add consumption, investment, government expenditures, and net exports.
Transfer payments, such as social security, welfare, and unemployment checks, on the other hand, are not included in the calculation of the GDP.
Example Question #2 : Gross Domestic Product
Which of these methods is a correct model for GDP?
The quantity of money times the velocity of money is equal to the real output times the price level. So, if the above equation is solved for Y, it gives us:
Example Question #1 : Gross Domestic Product
Which of the following is NOT a measure of income when using the income approach to calculate GDP?
Interest and investment income.
Income from farmers.
Governmental tax revenue.
Profits from corporations.
Wages and salaries.
Governmental tax revenue.
The income approach to calculating GDP will arrive at the same number as other approaches, such as the production approach or expenditure approach. The five sources of income used to calculate Income GDP, or Gross Domestic Income, are wages and salaries; interest and investment income; corporate profits; farmers' income; and non-farm unincorporated business profits.
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