Because GDP Does Not Account for Improvements in the Quality

question 95

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 Australia.
• B)tends to understate the true value of output in Australia.
• C)provides an accurate value of output in Australia.
• D)provides the best measure of output in Australia.
• E)measures the value correctly because price changes always capture the value of quality changes.

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Definitions:

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