Growth in GDP Systematically Understates the Growth in National Well-Being

question 144

Multiple Choice

Growth in GDP systematically understates the growth in national well-being because

• A)ecological costs are netted out of GDP.
• B)"bads" as well as "goods" get included in GDP.
• C)investment is not included in GDP.
• D)as a country gets richer, leisure time increases.

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Definitions:

Spending Variance

The difference between the actual expenditure and the budgeted amount.

Machine-Hours

A measure used to allocate manufacturing overhead costs to products based on the number of hours machines are used in the production process.

Spending Variance

A measure of the difference between the budgeted amount of expenses and the actual amount spent.

Flexible Budget

A flexible budget tailored to adjust as activity levels or volumes change.