Nominal Gross Domestic Product (GDP)is a Poor Measure of Economic

question 42

Multiple Choice

Nominal gross domestic product (GDP) is a poor measure of economic growth because it

• A) does not count investment by private businesses.
• B) overstates the importance of consumer spending.
• C) does not include government spending.
• D) ignores imports and exports.
• E) does not consider changes in prices or population growth.

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Definitions:

Turnover Measure

An indicator of the efficiency and effectiveness of a company in generating revenue or managing inventory, often expressed as a ratio.

Common-Size Statement

A financial statement in which each line item is expressed as a percentage of a significant total, facilitating comparison.

Comprehensive Income

The change in equity of a business enterprise during a period from transactions and other events from non-owner sources. It includes all forms of earnings and gains or losses.

Accounts Payable Turnover

A financial metric that measures the rate at which a company pays off its suppliers.