If National Income Accountants Fail to Make an Adequate Adjustment

question 91

Multiple Choice

If national income accountants fail to make an adequate adjustment for increases in the quality of goods and services over time,

• A) real GDP will overstate the growth rate of real output.
• B) the GDP deflator will underestimate inflation.
• C) the GDP deflator will overestimate inflation.
• D) real GDP will overstate the growth of real output, and the GDP deflator will understate inflation.

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