GDP Excludes Most Nonmarket Transactions

question 141

Multiple Choice

GDP excludes most nonmarket transactions. Therefore, GDP tends to:

• A) Underestimate the rate of inflation in the economy
• B) Overestimate the rate of inflation in the economy
• C) Overestimate the amount of production of the economy
• D) Underestimate the amount of production in the economy

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Definitions:

Ordered Pairs

Pairs of numbers used to represent points on a graph, with the first number indicating horizontal position and the second number vertical position.

Function

In mathematics, a relation between a set of inputs and a set of permissible outputs with the property that each input is related to exactly one output.

Simplify

In mathematics, to reduce an expression or equation to its simplest form or most understandable version.

Evaluate

The act of determining the worth of a given expression.