ECON 248 ACTUAL EXAM PAPER 2026
QUESTIONS WITH SOLUTIONS GRADED A+
●● Which one of the following would be included in the calculation of
GDP by the expenditure approach?
Select one:
a. the purchase of an original eighteenth century work of art
b. the purchase of 20 shares of a new issue of IBM stock
c. the value of your brother's services when he mows the lawn for the
family
d. the income you pay to your gardener
e. the cost of adding a new kitchen to your house
Answer: e. the cost of adding a new kitchen to your house
●● A bakery uses flour to produce bread for household consumption.
When calculating GDP, we include ________, because when we add the
value of the flour to the value of the loaf of bread to calculate GDP, the
result is ________.
Select one:
a. both the value of the bread sold in a store and the value of the flour
used to produce the bread / double counting
b. both the value of the bread sold in a store and the value of the flour
used to produce the bread / the true value of the economy's output
, c. only the value of the flour used to produce the bread / double counting
d. only the value of the bread sold in a store / double counting
e. None of the above combinations is correct.
Answer: d. only the value of the bread sold in a store / double counting
●● Gross domestic product is
Select one:
a. the market value of all goods and services produced in a country
during a given time period.
b. the market value of all the final goods and services produced in a
country during a given time period.
c. the final value of all goods produced in a country in a given time
period.
d. the market value of all the intermediate goods and services produced
in a country during a given time period.
e. the average value of output produced in a country in a given time
period.
Answer: b. the market value of all the final goods and services produced
in a country during a given time period.
●● Suppose you deposit $1000 in your saving account at your bank, and
a year later you have $1055. Over the same period, the consumer price
index falls from 200 to 196. In this case, the nominal interest rate is
_____%, inflation is _____%, and the real interest rate is _____%,
respectively.
QUESTIONS WITH SOLUTIONS GRADED A+
●● Which one of the following would be included in the calculation of
GDP by the expenditure approach?
Select one:
a. the purchase of an original eighteenth century work of art
b. the purchase of 20 shares of a new issue of IBM stock
c. the value of your brother's services when he mows the lawn for the
family
d. the income you pay to your gardener
e. the cost of adding a new kitchen to your house
Answer: e. the cost of adding a new kitchen to your house
●● A bakery uses flour to produce bread for household consumption.
When calculating GDP, we include ________, because when we add the
value of the flour to the value of the loaf of bread to calculate GDP, the
result is ________.
Select one:
a. both the value of the bread sold in a store and the value of the flour
used to produce the bread / double counting
b. both the value of the bread sold in a store and the value of the flour
used to produce the bread / the true value of the economy's output
, c. only the value of the flour used to produce the bread / double counting
d. only the value of the bread sold in a store / double counting
e. None of the above combinations is correct.
Answer: d. only the value of the bread sold in a store / double counting
●● Gross domestic product is
Select one:
a. the market value of all goods and services produced in a country
during a given time period.
b. the market value of all the final goods and services produced in a
country during a given time period.
c. the final value of all goods produced in a country in a given time
period.
d. the market value of all the intermediate goods and services produced
in a country during a given time period.
e. the average value of output produced in a country in a given time
period.
Answer: b. the market value of all the final goods and services produced
in a country during a given time period.
●● Suppose you deposit $1000 in your saving account at your bank, and
a year later you have $1055. Over the same period, the consumer price
index falls from 200 to 196. In this case, the nominal interest rate is
_____%, inflation is _____%, and the real interest rate is _____%,
respectively.
