GDP Tends to Underestimate the Productive Activity in the Economy

question 180

Multiple Choice

GDP tends to underestimate the productive activity in the economy because it excludes:

• A)spending by the government on military goods.
• B)spending by businesses to reduce the level of pollution.
• C)the work done by construction companies to remodel homes.
• D)the personal labour time homeowners spend on home repairs.

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Definitions:

Diathesis

A predisposition or vulnerability to developing a psychological disorder, often influenced by genetic, biological, or environmental factors.

DSM-IV

The Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, a guide published by the American Psychiatric Association for diagnosing mental disorders.

Psychological

Relating to the mind or mental processes, affecting or stemming from the psyche.

Physiological

Related to the normal functions of living organisms and their parts, encompassing biochemical, physical, and structural processes.