Why Is GDP Computed Using Market Prices as the Value

question 32

Multiple Choice

Why is GDP computed using market prices as the value of final goods and services?

• A) because market prices do not change much, so it is easy to make comparisons between years
• B) because if market prices are out of line with how people value goods, the government sets ceilings and floors on them
• C) because costs change too much to reflect the value of goods and services
• D) because market prices reflect the value of goods and services