One Major Reason That GDP Is an Inaccurate Measure of the True

question 95

Multiple Choice

One major reason that GDP is an inaccurate measure of the true level of economic activity is that

• A)people frequently buy things they do not want.
• B)it is statistically very inaccurate.
• C)it does not include non-market activities.
• D)it cannot be adjusted for changes in prices.
• E)it includes net exports.

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Definitions:

Indifference Curve

A graph showing different combinations of two goods that provide the same level of utility or satisfaction to a consumer.

Utility

In economics, a measure of satisfaction, usefulness or value that an individual gains from consuming goods and services.

Consumption Bundle

A combination of goods and services selected by a consumer for personal use.

T-Shirts

A basic item of clothing characterized by short sleeves, generally made of cotton, and lacking a collar.