Which of the Following Is a Shortcoming(s) of GDP as a Measure

question 121

Multiple Choice

Which of the following is a shortcoming(s) of GDP as a measure of total output?

• A)GDP does not include unpaid work.
• B)GDP does not include activities in the underground economy.
• C)GDP does not capture the full value of improvements in product quality.
• D)All the answer choices are correct.

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Definitions:

Internal Rate of Return Method

A capital budgeting method used to estimate the profitability of potential investments, calculated as the rate that makes the net present value of all cash flows zero.

Present Value Concepts

Financial principles used to determine the current value of future cash flows, taking into account specific rates of return or discount rates.

Net Cash Flows

The difference between a company's cash inflows and outflows within a defined period.

Annuity

A financial instrument that provides a consistent flow of payments to a person, mainly serving as a source of income for people in retirement.