Macroeconomics: Why Everyone Saving Can Make Us Poorer
How economists measure output, prices and jobs, and how spending, interest rates, budgets, central banks and exchange rates move whole economies.
Macroeconomics · 50 questions
Try 3 questions
1. Which of these transactions is counted in this year's GDP?
- Shares bought on the stock market
- A used car resold this year
- A new house built this year
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Answer: A new house built this year
GDP counts goods and services newly produced in the period; resales and purely financial trades just move existing assets around.
2. A family stops cooking at home and hires a cook to make the same meals. What happens to measured GDP?
- It falls by the amount of the wages
- It stays the same, as meals are equal
- It rises, though output is the same
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Answer: It rises, though output is the same
Unpaid home production isn't counted, but paid work is, so the same meals now add to GDP, one reason GDP is an imperfect welfare measure.
3. Nominal GDP rose 6% this year while prices rose 4%. Roughly how much did real GDP grow?
- 2%
- 10%
- 6%
Show the answer
Answer: 2%
Real growth strips out price changes: about 6% minus 4%, so most of the nominal rise was just inflation.
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