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ECON 2100 Exam 2 Questions and Correct
Answers
GDP is the Ans: Monetary value of all final goods and services
produced within the borders of a nation in a particular year.
Net exports are Ans: exports less imports
Real GDP refers to Ans: GDP data that have been adjusted for
changes in the price level.
The equation total production = total income = total expenditure
Ans: The fundamental identity of national income accounting
A price index is Ans: The price of a market basket in a given year
divided by the price of an identical market basket in a reference
year
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The concept of net domestic investment refers to Ans: Total
investment less the amount of investment goods used up in
producing the year's output.
The system that measures the economy's overall performance is
formally known as Ans: National income accounting
In determining GDP by the expenditures method, it is appropriate
to use net investment rather than gross investment as a measure
of investment spending Ans: False
Purchasing a two-year-old, secondhand laptop contributes nothing
to this year's GDP Ans: True
Gross private domestic investment exceeds depreciation in an
economy that experiences expanding production capacity Ans:
True
The three approaches to calculate Gross Domestic Product (GDP)
are: Ans: Income, Product, and Expenditure approaches
© 2025 All rights reserved
ECON 2100 Exam 2 Questions and Correct
Answers
GDP is the Ans: Monetary value of all final goods and services
produced within the borders of a nation in a particular year.
Net exports are Ans: exports less imports
Real GDP refers to Ans: GDP data that have been adjusted for
changes in the price level.
The equation total production = total income = total expenditure
Ans: The fundamental identity of national income accounting
A price index is Ans: The price of a market basket in a given year
divided by the price of an identical market basket in a reference
year
© 2025 All rights reserved
, 2 | Page
The concept of net domestic investment refers to Ans: Total
investment less the amount of investment goods used up in
producing the year's output.
The system that measures the economy's overall performance is
formally known as Ans: National income accounting
In determining GDP by the expenditures method, it is appropriate
to use net investment rather than gross investment as a measure
of investment spending Ans: False
Purchasing a two-year-old, secondhand laptop contributes nothing
to this year's GDP Ans: True
Gross private domestic investment exceeds depreciation in an
economy that experiences expanding production capacity Ans:
True
The three approaches to calculate Gross Domestic Product (GDP)
are: Ans: Income, Product, and Expenditure approaches
© 2025 All rights reserved
