One of the Problems with the Definition of Economic Growth

question 187

Multiple Choice

One of the problems with the definition of economic growth is that

• A) it overstates economic growth because it does not account for leisure time.
• B) it does not account for the distribution of income.
• C) it overstates economic growth because it does not account for the reduction in work time.
• D) it understates economic growth because it does not account for the reduction in work time.

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Definitions:

Present Value

The present valuation of a series of future cash inflows or a one-time sum, based on a specified rate of return.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan balance.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, considering the time value of money.

Individual Retirement Account

A tax-advantaged investing tool that individuals use to earmark funds for retirement savings.