Using GDP as a Measure of the Economic Well-Being of a Country

question 81

Multiple Choice

Using GDP as a measure of the economic well-being of a country can be criticized for ignoring non-market and other activities.However,it remains useful because

• A)GDP is the best measure we have of the effects of economic "bads" on the well-being of the country.
• B)the change in GDP from one year to the next is a good indication of what rates of inflation and unemployment will be.
• C)it provides a good indication of household income distribution when measured from the income side.
• D)the change that is measured in GDP from one year to the next is a good indication of the change in economic activity.
• E)it is simply not possible to reform the current measure of GDP.

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Definitions:

Cola

A carbonated soft drink flavored with extract from cola nuts along with other flavorings.

Revealed Preference

Revealed preference is a theory that assumes individuals' preferences can be determined by their purchasing behaviors, revealing their choices and priorities.

Market Basket

A fixed set of goods and services whose price is regularly monitored and used to measure the cost of living and inflation.

Expensive

Describing something that requires a high cost or large amount of money to purchase or obtain.