In Computing GDP, Market Prices Are Used to Value Final

question 9

Multiple Choice

In computing GDP, market prices are used to value final goods and services because

• A) market prices reflect the values of goods and services to the buyer.
• B) market prices do not change much over time, so it is easy to make comparisons between years.
• C) if market prices are out of line with how people value goods, the government sets price ceilings and price floors.
• D) None of the above is correct; market prices are not used in computing GDP.

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Definitions:

Global Segmentation

The process of dividing a global market into distinct subgroups of consumers with common preferences or needs.

Common Needs

Shared or universal requirements among a group of people or within a market segment, influencing product design and marketing strategies.

Entire Globe

A term used to denote the whole world or planet Earth.

Competitive Analysis

Examination of competitors and their products or services to identify strengths and weaknesses relative to one's own business.