Economists Generally Use GDP to Measure a Nation's Total Output

question 29

Multiple Choice

Economists generally use GDP to measure a nation's total output because it is

• A) equal to the sales value of all transactions conducted during a period and thus can be easily calculated.
• B) the best available measure of the true costs of producing consumer goods.
• C) unaffected by changes in the prices of products over time.
• D) a relatively reliable measure of the value of all final product goods and services produced during a specific time period.

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Definitions:

U.S. Net Exports

Represents the value of a country's total exports minus its total imports, indicating whether a country is a net exporter or importer.

U.S. Net Capital Outflow

The unequal ratio of domestic purchases of overseas assets to foreign purchases of domestic assets.

Domestic Investment

Domestic investment is the spending on capital equipment, inventories, and structures within a country by its residents and businesses.

Trade Deficits

A situation where a country's imports of goods and services exceed its exports.