Economics: GDP and Exchange Rates Practice Quiz

Associate Level: This document serves as a practice quiz and includes the answers to the following questions:

1. What is the formula for GDP
2. Distinguish between nominal and real GDP.
3. Using the formula for GDP, Explain one way that a county can grow its GDP.
4. St Lulu residents own an insurance company in Tortola. Whose GDP is it counted in? Justify your answer.
5. Whose GNP is it counted in? Justify your answer.
6. Politician Sabie Highfigure said that the GDP grew in leaps and bound. Media man said these politicians must stop confusing the people. He should tell the people if this is real GDP or not. What is he talking about? Explain in details.
7. Explain how a decline in government spending could affect the Gross Domestic Product of St. Martins
8. List three types of exchange rates
9. South St. Martin (dutch) has a fixed exchange rate. What would be two disadvantages of switches to a floating exchange rate?
10. Which exchange rate do you think is superior? Justify your answer
11. If China devalue its currency what would be the impact on its economy and why?