Is GDP an Accurate Measure of a Country's Well Being

question 20

Multiple Choice

Is GDP an accurate measure of a country's well being?

• A)Yes, it is the best measure of national well being.
• B)Yes, provided we use real GDP and not nominal GDP.
• C)The answer is uncertain, depending on whether GDP is rising or falling.
• D)No, it is not.

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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 competitors, underpinning the basis for trade.

World Price

The price of a good or service on the international market, shaped by the global forces of supply and demand.

Domestic Price

The cost of products or services in a country, affected by domestic demand and supply factors.

Tariff

A tax or duty to be paid on a particular class of imports or exports, often used as a tool for trade policy.