Even When Measured Accurately, GDP May Be a Misleading Measure

question 66

Multiple Choice

Even when measured accurately, GDP may be a misleading measure of economic welfare because it cannot account for

• A)the value of non-market production and the consequences of an unequal distribution of income.
• B)the value of government spending and how efficiently we produce goods and services.
• C)the cost of intermediate goods and services.
• D)the consequences of an unequal distribution of income and the value of government spending.
• E)how efficiently we produce goods and services and the value of non-market production.

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Definitions:

Unit Product Cost

The total cost (both fixed and variable) associated with producing a single unit of a product.

Unit Product Cost

The total cost involved in manufacturing or producing one unit of a product, including materials, labor, and overhead.

CM Ratio

Stands for Contribution Margin Ratio; it is a financial metric that measures the proportion of revenue that exceeds variable costs and contributes to covering fixed costs and generating profit.

Segmented Income Statement

An income statement that presents revenues, expenses, and profits for different segments of a business, offering detailed financial analysis.