Real GDP Is Not a Perfect Indicator of Economic Welfare

question 128

Multiple Choice

Real GDP is not a perfect indicator of economic welfare because_________ .

• A) economic welfare depends on many factors not measured or not measured accurately by real GDP
• B) it includes the underground economy
• C) it includes a direct measure of health and life expectancy
• D) it underestimates inflation

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Definitions:

Lord Kelvin

A British physicist and engineer known for his work in thermodynamics and for developing the Kelvin scale of temperature measurement.

Rigid Sphere

A solid, inflexible object shaped like a ball or globe.

Heat Loss

The transfer of thermal energy from one object or organism to its cooler environment, affecting the temperature balance.

Homo Sapiens

The scientific name for modern humans, characterized by bipedalism, high brain capacity, and complex language and social structures.