Asked by Chih-Hsiang Chang on Jun 25, 2024
Verified
In evaluating an economy's performance over a period of years,real GDP provides a better measuring rod than GDP because
A) GDP is distorted by its failure to show qualitative improvements in the products we manufacture.
B) real GDP is adjusted for the social and environmental costs of production,which are normally not compensated.
C) real GDP includes such productive endeavors as housewife services and home repairs that are performed by households without payment.
D) GDP reflects changes in prices as well as changes in output.
Real GDP
Gross Domestic Product adjusted for inflation, providing a more accurate representation of an economy's size and how it's grown over time.
Economic Welfare
A broad measure that evaluates the standard of living and overall well-being of people within an economy.
Qualitative Improvements
Enhancements to the features, performance, or quality of a product or service that go beyond mere quantitative changes.
- Comprehend the principles behind Gross Domestic Product (GDP) and real GDP, including the methods for their computation and analysis.
- Evaluate the limitations of GDP as a measure of economic welfare and performance.
Verified Answer
Learning Objectives
- Comprehend the principles behind Gross Domestic Product (GDP) and real GDP, including the methods for their computation and analysis.
- Evaluate the limitations of GDP as a measure of economic welfare and performance.
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