GDP Is Not a Perfect Measure of Well-Being;for Example

question 3

Multiple Choice

GDP is not a perfect measure of well-being;for example,

• A)GDP incorporates a large number of non-market goods and services that are of little value to society.
• B)GDP places too much emphasis on the value of leisure.
• C)GDP fails to account for the quality of the environment.
• D)All of the above are correct.

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Definitions:

Substitution Effect

If the price of a resource, say labor, goes up, business firms tend to substitute capital or land for some of their now-expensive workers. Also, the substitution of more hours of work for leisure time as the wage rate rises.

Substitution Effect

The economic principle that as prices rise, consumers will replace costlier items with less expensive alternatives, holding the utility they receive constant.

Manufacturing Wage Rates

The amount of remuneration or earnings per unit of time by workers in the manufacturing sector.

College Graduate

An individual who has successfully completed a degree program at a college or university.