2012 Macro Multiple Choice - GDP
(A) An increase in real per capita gross domestic product
(B) nominal per capita GDP has more to due with inflation increase
(C) Price stability - all can be poor and prices stabile
(D) A balanced budget - Taxes collected = government expenditures - doesn't really speak to standards of living.
(E) CPI - has to due with inflation,, and an increase might have made people worse off.
Answer - (D)
GDP = C + I + GS + XN
Consumption = $3000
Investment = $700
GS = $1,000
XN = Exports - Imports = 300 - 500 = -200
$3,000 + $700 + $1,000 + 300 - 500 = $4,500
Answer - (A) $4,500