MCQ Academy - English

Why can state GDP and metro-area GDP give different totals for New Jersey activity?

• Metro GDP includes only New Jersey companies with headquarters in Newark
• State GDP and metro GDP always have identical boundaries in the Northeast
• Their geographic boundaries are not identical
• State GDP excludes the output of firms operating in a metropolitan county

Why might revised GDP figures for 2023 differ from figures published earlier?

• The BEA replaces every historical estimate with a simple inflation factor
• Yearly values are automatically adjusted to the newest population count only
• Previous GDP totals must remain fixed under federal statistical rules
• BEA incorporates new data and methodological updates

How does a real GDP growth rate differ from a real GDP level?

• Growth is a percentage change; level is an output measure
• Growth is the nominal-dollar difference between two years; level is a percentage
• Growth is the difference in employment; level is income per person
• Real GDP growth tracks prices alone while the level tracks physical output

What does quarterly GDP reported at an annual rate describe?

• The cumulative output produced in the previous four quarters
• A quarter’s production expressed at a yearly pace
• Production in the current quarter stated without annualization
• A seasonally adjusted estimate of only the final month of the quarter

Why should chained-dollar industry GDP components not always be summed to reconstruct total GDP?

• Industry accounts include only private companies, while total GDP includes government
• Real industry output is measured at current prices but total output uses fixed quantities
• Chain-type quantity indexes are not strictly additive across components
• An industry’s value added is identical to its gross sales in all periods

What limits a comparison of nominal GDP across two years?

• Year-to-year population changes are the only reason nominal GDP can change
• Nominal GDP removes all changes in market prices by construction
• Nominal GDP is calculated from quantities alone with no monetary valuation
• Different prices may contribute to the change

Which statement distinguishes state GDP from residents’ disposable income?

• GDP measures in-state production, while disposable income tracks income available after personal taxes
• GDP and disposable income both track household cash flow but use different price indexes
• GDP records household net wealth whereas disposable income measures firms’ annual profit
• GDP measures production by residents anywhere, while disposable income covers production inside the state

Why can a New Jersey commuter’s wages relate to GDP generated outside New Jersey?

• Cross-state earnings are allocated to the worker’s place of residence in GDP
• The person may work and produce output in another state
• State GDP adds all commuting costs to output in the origin state
• Regional GDP assigns production according to homeownership rather than workplace

Which location determines where production enters a state’s GDP?

• The headquarters location of each corporation
• The state where employees report personal income taxes
• The place where production occurs
• The place where business profits are distributed to shareholders

Why does BEA use a value-added approach to estimate state GDP?

• To measure sales revenue at each stage and then sum all transactions
• To exclude depreciation from all manufacturing output
• To replace income-based accounts with household expenditure surveys
• To avoid counting intermediate business sales repeatedly as final output