GDP: Measuring an Economy and What It Misses · seed 1 · A4, ink-friendly. The answer key prints on its own page for grown-ups.

What GDP counts and what it cannot see

Civics & Economics · Economics · ages 15-16
Name ______________________   Date ____________

  1. What are the four spending parts of GDP?

    • Consumption, investment, government spending, net exports
    • Bread, flour, ovens, wheat
    • Wages, profits, taxes, tips

  2. A baker buys flour for 1 coin and sells bread for 3. What enters GDP?

    • 4 coins, counting flour and bread
    • 3 coins, counting the final bread only
    • 1 coin, counting the flour only

  3. Real GDP strips out price changes so years compare fairly.

    Circle one:   True   False

  4. A town pays to clean an oil spill. What happens to GDP?

    • It falls, since cleaning is free
    • It stays frozen forever
    • It rises, since paid cleanup counts as output

  5. Country A has higher GDP per head than country B. What is hidden?

    • Nothing, averages tell everything
    • Inequality and price gaps that a rich average can mask
    • The number of bakeries

  6. Which decision should NOT rest on GDP alone?

    • Climate policy, where nature loss matters more than output
    • Counting loaves sold
    • Splitting a restaurant bill

  7. A boom doubles top incomes while most pay stalls. GDP per head jumps. What is the flaw in celebrating?

    • GDP ignores distribution, so a boom for the few mimics a boom for all
    • GDP per head cannot ever rise
    • Only bakers count in GDP

  8. GDP grows 4 percent while rivers die and free time shrinks. What follows?

    • Life plainly improved for everyone
    • Output rose, but living standards may have fallen outside the ledger
    • GDP must be recalculated in flour
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Answer key

For grown-ups. Fold this page away before handing over the rest.

What GDP counts and what it cannot see W1-mt_JFm9bVs0_n-s1

  1. Consumption, investment, government spending, net exports · The four show who bought the nation's output.
  2. 3 coins, counting the final bread only · Count the loaf once; the flour is already inside its price.
  3. True · Real removes inflation, leaving genuine growth visible.
  4. It rises, since paid cleanup counts as output · Paying to fix harm perversely lifts the total.
  5. Inequality and price gaps that a rich average can mask · A rich average can mask a poorer typical citizen.
  6. Climate policy, where nature loss matters more than output · Health, schooling and climate need wellbeing measures too.
  7. GDP ignores distribution, so a boom for the few mimics a boom for all · Median income would tell the truer story here.
  8. Output rose, but living standards may have fallen outside the ledger · Growth on the ledger can pair with loss off it.
Worksheet · LightMySky