Which of the Following Represents a Problem with Using Per

question 103

Multiple Choice

Which of the following represents a problem with using per capita GDP to compare standards of living between less-developed and industrially advanced countries? ​​

• A) ​ GDP per capita does not take into account differences in population between countries.
• B) ​ GDP is particularly difficult to measure in industrially advanced countries because a much larger percentage of economic activity occurs outside of officially measured market activity than in less-developed countries.
• C) ​ GDP per capita will overstate the prevailing standard of living for the average person in countries with extreme levels of income inequality.
• D) ​ None of the above are correct.

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Definitions:

Public Interest

Denotes the well-being of the general public and the consideration of what is beneficial for society as a whole.

Economic Profits

Profits exceeding the opportunity costs of all inputs, indicating a return beyond the norm expected in the market or industry.

Industry

A sector of the economy characterized by a specific type of activity or product, such as manufacturing, technology, or services.

Firms

Business organizations that produce goods or provide services with the aim of making a profit.