Why Do Economists Prefer to Compare Real GDP Figures for Various

question 99

Multiple Choice

Why do economists prefer to compare Real GDP figures for various years instead of GDP figures?

• A) Because when GDP in one year is higher than in another year,there is no way to tell why it is higher.Is it because output is higher,prices are higher,etc.? This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because output is higher.
• B) Because when GDP in one year is higher than in another year,there is no way of knowing if the quality of goods produced is higher in one year than the other.This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because the quality of the goods produced is higher.
• C) Actually the question is incorrect.Economists prefer to compare GDP figures instead of Real GDP figures.
• D) Because Real GDP is easier to compute than GDP.
• E) Because when GDP in one year is higher than in another year,there is no way to tell if the quality of life is higher in one year than the other.This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because the quality of life is higher.

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Definitions:

Median

The middle value in a data set when the values are arranged in ascending or descending order.

Skewed

Refers to a distribution that is asymmetrical, with data points tending to be more spread out on one side of the mean than the other.

Travel Time

The duration taken to move from one location to another, often considered in planning and analysis of transportation systems.

Bin Width

The size of intervals in a histogram or frequency distribution, affecting data visualization and analysis.