In Computing GDP,market Prices Are Used to Value Final Goods

question 74

Multiple Choice

In computing GDP,market prices are used to value final goods and services because

• A) market prices do not change much over time,so it is easy to make comparisons between years.
• B) market prices reflect the values of goods and services.
• C) if market prices are out of line with how people value goods,the government sets price ceilings and price floors.
• D) None of the above is correct;market prices are not used in computing GDP.

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Definitions:

Real GDP

Gross Domestic Product adjusted for inflation, providing a more accurate representation of an economy's size and how it's growing over time.

Nominal GDP

The gross domestic product measured at current market prices, without adjusting for inflation, reflecting the value of all goods and services produced by a country.

Environmental Quality

The condition of the natural environment and its ability to sustain life, characterized by factors such as air and water purity and biodiversity.

Volunteer Work

Unpaid tasks performed by individuals or groups to offer their services and help in various sectors, often for the benefit of the community.