Types of GDP CDS Questions

CDS Economy

Types of GDP MCQ Questions


7.
A GDP deflator value of 95 (with base-year value 100) indicates that, since the base year, the general price level has:
A.
Risen (inflation relative to the base year)
B.
Remained exactly the same
C.
Risen by 95 per cent
D.
Fallen (deflation relative to the base year)
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ANSWER :
D. Fallen (deflation relative to the base year)
8.
Real GDP can be computed from Nominal GDP using which of the following formulae?
A.
Real GDP = (GDP deflator / Nominal GDP) × 100
B.
Real GDP = Nominal GDP × GDP deflator × 100
C.
Real GDP = Nominal GDP + GDP deflator
D.
Real GDP = (Nominal GDP / GDP deflator) × 100
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ANSWER :
D. Real GDP = (Nominal GDP / GDP deflator) × 100
9.
If between two years Nominal GDP rises but the physical quantity of output is completely unchanged, then Real GDP will:
A.
Rise by the same percentage as Nominal GDP
B.
Become equal to the GDP deflator
C.
Remain unchanged
D.
Fall sharply
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ANSWER :
C. Remain unchanged
10.
Which of the following statements about Nominal GDP and Real GDP is correct?
A.
Real GDP is computed using current-year prices
B.
Nominal GDP can increase even when actual production declines, due to a rise in prices
C.
Real GDP increases automatically whenever prices increase
D.
Nominal GDP is always lower than Real GDP
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ANSWER :
B. Nominal GDP can increase even when actual production declines, due to a rise in prices
11.
During a period of inflation (prices rising above base-year levels), how does Nominal GDP typically compare with Real GDP?
A.
The two are unrelated during inflation
B.
Nominal GDP equals Real GDP
C.
Nominal GDP is less than Real GDP
D.
Nominal GDP exceeds Real GDP
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ANSWER :
D. Nominal GDP exceeds Real GDP
12.
The GDP deflator differs from the Consumer Price Index (CPI) mainly because the GDP deflator:
A.
Includes only imported consumer goods
B.
Covers all final goods and services produced domestically, not just a fixed consumer basket
C.
Is always lower than the CPI by construction
D.
Is based on a fixed basket that never changes
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ANSWER :
B. Covers all final goods and services produced domestically, not just a fixed consumer basket