age 1 of 110
Clemson Econ 2130 Final Exam ACTUAL QUESTIONS
AND CORRECT DETAILED ANSWERS LATEST UPDATE
THIS YEAR.pdf
1) Gross Domestic Product (GDP) is defined as:
A) The market value of all final goods and services produced in
a country in a year
B) The total income earned by all citizens of a country
C) The total value of all transactions in an economy
D) The market value of all goods and services consumed in a
country
Correct Answer: A
,age 2 of 110
Rationale: GDP is the market value of all final goods and
services produced within a country's borders in a given period,
typically a year. Only final goods are counted to avoid double
counting intermediate goods.
2) The expenditure approach to measuring GDP uses the
accounting identity:
A) Y = C + I + G + NX
B) Y = C + I + G - NX
C) Y = C + I + G + EX - IM
D) Y = Employee Compensation + Taxes + Rents + Interest +
Profits
,age 3 of 110
Correct Answer: A
Rationale: The expenditure approach identity is Y = C + I + G
+ NX, where C is consumption, I is investment, G is government
spending, and NX is net exports (exports minus imports). This is
the national income identity.
3) Which component of GDP is the largest in the United States?
A) Investment (I)
B) Government spending (G)
C) Consumption (C)
D) Net exports (NX)
, age 4 of 110
Correct Answer: C
Rationale: Consumption (C) is consistently the largest component
of U.S. GDP, typically accounting for about 70% of economic
activity. This includes spending by households on goods and
services.
4) If you purchase a BMW that was produced in Germany for
$45,000, what happens to U.S. GDP?
A) GDP increases by $45,000
B) GDP decreases by $45,000
Clemson Econ 2130 Final Exam ACTUAL QUESTIONS
AND CORRECT DETAILED ANSWERS LATEST UPDATE
THIS YEAR.pdf
1) Gross Domestic Product (GDP) is defined as:
A) The market value of all final goods and services produced in
a country in a year
B) The total income earned by all citizens of a country
C) The total value of all transactions in an economy
D) The market value of all goods and services consumed in a
country
Correct Answer: A
,age 2 of 110
Rationale: GDP is the market value of all final goods and
services produced within a country's borders in a given period,
typically a year. Only final goods are counted to avoid double
counting intermediate goods.
2) The expenditure approach to measuring GDP uses the
accounting identity:
A) Y = C + I + G + NX
B) Y = C + I + G - NX
C) Y = C + I + G + EX - IM
D) Y = Employee Compensation + Taxes + Rents + Interest +
Profits
,age 3 of 110
Correct Answer: A
Rationale: The expenditure approach identity is Y = C + I + G
+ NX, where C is consumption, I is investment, G is government
spending, and NX is net exports (exports minus imports). This is
the national income identity.
3) Which component of GDP is the largest in the United States?
A) Investment (I)
B) Government spending (G)
C) Consumption (C)
D) Net exports (NX)
, age 4 of 110
Correct Answer: C
Rationale: Consumption (C) is consistently the largest component
of U.S. GDP, typically accounting for about 70% of economic
activity. This includes spending by households on goods and
services.
4) If you purchase a BMW that was produced in Germany for
$45,000, what happens to U.S. GDP?
A) GDP increases by $45,000
B) GDP decreases by $45,000
