GDP Is Not a Perfect Measure of Material Well-Being Because

question 13

Multiple Choice

GDP is not a perfect measure of material well-being because it ignores

• A)production of goods and services by the government
• B)goods produced in the United States but shipped overseas
• C)negative externalities
• D)consumer spending on services
• E)business spending on equipment

---

Definitions:

Interest Rate

The percentage of the principal amount charged by lenders to borrowers for the use of money.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Auto Loan Payments

Regular payments made by a borrower to a lender for the use of borrowed money to purchase an automobile, typically including both principal and interest.

Discount Rates

Interest rates used to calculate the present value of future cash flows.