Why Do Economists Prefer to Compare Real GDP Figures for Various

question 99

Multiple Choice

Why do economists prefer to compare Real GDP figures for various years instead of GDP figures?

• A) Because when GDP in one year is higher than in another year,there is no way to tell why it is higher.Is it because output is higher,prices are higher,etc.? This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because output is higher.
• B) Because when GDP in one year is higher than in another year,there is no way of knowing if the quality of goods produced is higher in one year than the other.This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because the quality of the goods produced is higher.
• C) Actually the question is incorrect.Economists prefer to compare GDP figures instead of Real GDP figures.
• D) Because Real GDP is easier to compute than GDP.
• E) Because when GDP in one year is higher than in another year,there is no way to tell if the quality of life is higher in one year than the other.This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because the quality of life is higher.

---

Definitions:

FMOT

First Moment of Truth; a marketing concept referring to the first time a consumer encounters a product and forms an impression.

Sustainability

The principle of meeting current needs without compromising the ability of future generations to meet their own, often focusing on environmental, economic, and social balance.

Reciprocity

The practice of exchanging things with others for mutual benefit, especially privileges granted by one country or organization to another.

Transparency

The practice of being open, honest, and straightforward about various aspects of a company's operations, policies, and decisions.