Economists Do Not Use Actual Values of Real GDP to Measure

question 8

Multiple Choice

Economists do not use actual values of real GDP to measure economic growth because

• A) real GDP holds price level constant, but in reality price level changes from year to year.
• B) changes in real GDP could be due to fluctuations in the level of economic activity.
• C) economic growth encompasses more than just growth in output.
• D) changes in real GDP do not provide any information about income distribution.

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Definitions:

Expected Rate

The anticipated return on an investment over a certain period.

Beta

A measure of a stock's volatility in relation to the overall market, where a beta greater than 1 indicates greater volatility than the market.

Portfolio Beta

A measure of the volatility of a portfolio relative to the market as a whole.

Security A

This is not a specific financial term; often "Security A" could refer to a generic or hypothetical security in examples or educational content.