Gross Domestic Product (GDP) Figures May Understate the Value of Goods

question 269

Multiple Choice

Gross Domestic Product (GDP) figures may understate the value of goods and services due to

• A) the exclusion of the underground economy.
• B) the inclusion of household production.
• C) the inclusion of legal non-reported, non-taxed income.
• D) the exclusion of the value of stocks.

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Definitions:

Ultimatum Game

A behavioral economics game in which a mutually anonymous pair of players interact to determine how an amount of money is to be split. The first player suggests a division. The second player either accepts that proposal (in which case the split is made accordingly) or rejects it (in which case neither player gets anything).

Neoclassical Economics

A method in economics that concentrates on how supply and demand determine the distribution of goods, outputs, and incomes within various markets.

Behavioral Economics

A field of economic research that analyzes how psychological, social, cognitive, and emotional factors affect economic decisions of individuals and institutions.

Ultimatum Games

A type of game in experimental economics where two players interact to decide how to divide a sum of money; one proposes the split, and the other accepts or rejects it.