Which of the Following Statements Is TRUE About GDP

question 194

Multiple Choice

Which of the following statements is TRUE about GDP?

• A) GDP includes all known goods and services in the underground economy.
• B) GDP includes a negative adjustment for damage caused by pollution.
• C) GDP does not account for the distribution of income in a country.
• D) GDP includes a positive adjustment for the value of leisure and well-being.

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Definitions:

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than others, leading to more efficient trade possibilities.

Absolute Advantage

The ability of a country or entity to produce a good more efficiently (using fewer resources) than another country or entity.

Economic Efficiency

A condition where resources are allocated in a way that maximizes the production of goods and services at the lowest cost to society.

Opportunity Cost

The value of the next best alternative forgone as a result of making a decision.