If We Calculate GDP by Adding the Dollars of All

question 139

Multiple Choice

If we calculate GDP by adding the dollars of all goods that buyers pay, we make an error as a result of

• A)omitting opportunity costs.
• B)double counting some goods.
• C)missing the negative values that some buyers perceive for some goods.
• D)omitting some measures of well-being.
• E)ignoring inflation.

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Definitions:

Short Run

In economics, a timeframe during which the production process has limitations due to fixed resources, leading to constraints on firm adjustments and outputs.

Long Run

The long run is a period in economics during which all factors of production and outputs are variable and can be adjusted, contrary to the fixed factors present in the short run.

Marginal Cost Curve

A visual display illustrating the variation in the expense of manufacturing an extra item of a product as the quantity produced alters.

Peak Efficiency

The state of operation where a system or process achieves its maximum productivity with minimal waste and effort.