Because GDP Does Not Account for Improvements in the Quality

question 111

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

---

Definitions:

Gray Limestone

A sedimentary rock primarily composed of calcium carbonate, often containing fossils, and typically forming in shallow marine environments.

Well-Sorted Sandstone

Sandstone comprised of grains that are uniform in size, indicating a specific and consistent energy environment during deposition.

Dark Porous

Referring to rocks that have a dark color and contain numerous small holes or pores.

Lichens

Symbiotic organisms made up of a fungus and either an algae or a cyanobacteria, living together and often found on rocks, trees, and soil.