The GDP Underestimates the Value of the Nation's Output

question 56

True/False

The GDP underestimates the value of the nation's output.

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Definitions:

Technological Advances

Innovations and improvements in technology that enhance productivity, efficiency, and can lead to new products or processes.

Output Effect

The possibility that when the price of the first of a pair of substitute resources falls, the quantity demanded of both resources will rise because the reduction in the price of the first resource so greatly reduces production costs that the volume of output created with the two resources increases by so much that the quantity demanded of the second resource increases even after accounting for the substitution effect.

Pasture Land

This term describes land that is used for the grazing of livestock such as cows and sheep.

Productivity

The measure of how efficiently goods and services are produced, often assessed by the output per unit of input, such as labor or capital.