California Economy

What does gross domestic product measure?

• Only household savings
• Only imports entering a state
• Only government tax revenue
• The value of goods and services produced within an economy

Why should California GDP not be treated as state government revenue?

• Government revenue includes all private sales.
• GDP measures production, while government revenue measures public-sector receipts.
• GDP and tax revenue are always identical.
• GDP measures only state taxes.

Why is GDP different from household or personal income?

• GDP measures production rather than the income received by a particular household or person.
• GDP is simply average household salary.
• Personal income measures total state production.
• GDP measures only wages.

Why should a quarterly GDP figure reported at an annual rate not be called the final annual GDP?

• It extrapolates one quarter’s pace rather than reporting a completed year.
• It includes no economic activity.
• It is always a ten-year average.
• It measures only population.