What Does Real GDP Measure

question 181

Multiple Choice

What does real GDP measure?

• A) the dollar value of all goods
• B) economic activity and income
• C) primarily long-run trends
• D) profitability of all companies in the economy

---

Definitions:

Price

The money amount expected, needed, or conferred as a payment for a product.

Miles

A unit of distance or length, traditionally equal to 5280 feet in the United States and slightly more than 1609 meters by international agreement.

Perfect Substitutes

Goods that a consumer is completely indifferent between, meaning that one can replace the other in consumption without any loss of utility.

Income Effect

The income effect describes how a change in a consumer's income affects their purchasing power and consumption choices.