Because GDP Does Not Account for Improvements in the Quality

question 75

Multiple Choice

Because GDP does not account for improvements in the quality of goods, the GDP calculation:

• A) tends to overstate the true value of output in the United States.
• B) tends to understate the true value of output in the United States.
• C) provides an accurate value of output in the United States.
• D) provides the best measure of output in the United States.

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Definitions:

Journal Entry

The act of recording financial transactions in a business's accounting records, marking the fundamental process of maintaining double-entry bookkeeping.

Owner Withdrawal

The amount of money or assets that the owner takes from the business for personal use.

Utilities Expense

The cost incurred by a business or household for essential services such as electricity, water, and gas.

Utility Bill

A periodic invoice received by consumers for usage of utilities such as electricity, water, natural gas, or sewage services.