Why Is Real GDP Not a Good Measure of Average

question 104

Multiple Choice

Why is real GDP not a good measure of average material living standards?

• A)Because it is biased by the changes in the inflation rate.
• B)Because it excludes the role of imported goods.
• C)Because it does not take into account the size of the population.
• D)Because it is sensitive to the base year chosen in its calculation.
• E)Because the price level may be changing,which affects what people can afford to buy.

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Definitions:

Number of Groups

Refers to the count of distinct categories or clusters into which the subjects or data points in a study are divided for analysis.

Critical Value

A point on the scale of the test statistic beyond which we reject the null hypothesis.

Groups

Collections of individuals or items categorized together based on shared characteristics or purposes.

Expected Frequencies

Expected frequencies refer to the counts of observations that one expects in each category of a statistical distribution based on a hypothesis or model.