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:

Qualitative Variables

Variables that express qualitative attributes, and are usually described by non-numeric categories or groups.

Regression Model

A statistical approach for estimating the relationships among variables, often used for prediction and forecasting.

Dummy Variables

Variables created to assign numerical values to categorical data, often used in regression analysis to include qualitative factors as independent variables.

Qualitative Variables

Variables that categorize or describe attribute characteristics without a natural numerical order or ranking.