According to Economists, Why Is It Useful to Measure the Behaviour

question 26

Multiple Choice

According to economists, why is it useful to measure the behaviour of the economy with statistics such as GDP?

• A) It can be used to forecast economic recessions and prevent them.
• B) It measures the total value of a country's wealth.
• C) It can be helpful in developing macroeconomic science, but is not useful for policymaking.
• D) It is a crucial step toward developing the science of macroeconomics.

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Definitions:

Demand Curve

A graphical representation of the relationship between the price of a good or service and the quantity demanded for it over a given period of time.

ATC

The total production cost per unit, calculated by dividing the entire cost of production by the number of products made.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, and economic forces are balanced, leading to no net tendency for the market to change.

Monopolistic Competition

A market structure characterized by many firms selling similar but not identical products, allowing each to maintain some control over pricing.