Which of the Following Statements Is the Best Critique of the Use

question 10

Multiple Choice

Which of the following statements is the best critique of the use of GDP per capita to compare welfare between nations?

• A) GDP per capita is commonly used as a measure of welfare so it must be a valid measure.
• B) GDP per capita is independent of the country's currency so it is not subject to change due to variations in exchange rates.
• C) GDP per capita is calculated in a consistent and reliable way so it is not subject to measurement errors.
• D) GDP per capita is highly correlated with alternative measures of quality of life .

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Definitions:

Economic Decisions

Choices made by individuals, households, firms, or governments regarding allocation of scarce resources to satisfy various needs and desires.

Tax Revenue

Tax Revenue refers to the income that is gained by governments through taxation, which is then used to fund public services and governmental operations.

Excess Burden

The additional cost to society beyond taxes collected resulting from inefficiencies in market outcomes due to taxation or regulations.

Tax Revenue

Funds accumulated by governments as a result of taxation.