### All AP Macroeconomics Resources

## Example Questions

### Example Question #1 : Ap Macroeconomics

Each of the following is included in the gross domestic product EXCEPT _________.

**Possible Answers:**

Transfer payments

Consumption

Government Expenditures

Net Exports

**Correct answer:**

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 #1 : Ap Macroeconomics

Which of these methods is a correct model for GDP?

**Possible Answers:**

**Correct answer:**

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 : Ap Macroeconomics

Which of the following is NOT a measure of income when using the income approach to calculate GDP?

**Possible Answers:**

Governmental tax revenue.

Interest and investment income.

Wages and salaries.

Profits from corporations.

Income from farmers.

**Correct answer:**

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.

### Example Question #1 : Tables

In a certain year, nominal gross domestic product grew by 8 percent. The inflation rate was 4 percent. Real gross domestic product for this year was _______.

**Possible Answers:**

grew by 8 percent

grew by 4 percent

grew by 12 percent

remained constant

**Correct answer:**

grew by 4 percent

Nominal GDP growth refers to the rate at which real GDP increases. To find real GDP growth (i.e. GDP growth that accounts for inflation), subtract the inflation rate from the nominal GDP growth rate.

In this case, the nominal GDP growth rate is 8 percent, and the inflation rate is 4 percent. Thus, the real GDP growth rate is 4%.

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