Use of Real GDP to Measure Changes in National Output

question 183

Multiple Choice

Use of real GDP to measure changes in national output from one period to another can be misleading if

• A) the price level is different for the two periods.
• B) the share of production carried out in the nonmarket sector is different for the two periods.
• C) the bundle of goods produced during the periods is quite similar.
• D) the size of the export-import sector differs for the two periods.

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Definitions:

Compensating Differential

Additional wage or payment provided to workers to compensate for undesirable aspects of a job, such as risk or unpleasant conditions.

Compensating Wage Differential

A financial adjustment to salaries that aims to balance out less desirable aspects of a job, such as hazardous conditions or irregular hours.

Supply Of Labor

The supply of labor refers to the total hours that workers wish to work at a given real wage rate.

Labor Economists

Specialists who study the dynamics of the labor market, including employment, wages, and labor productivity.