GDP Tends to Underestimate the Productive Activity in the Economy

question 98

Multiple Choice

GDP tends to underestimate the productive activity in the economy because it excludes the value of output from:

• A)public transfer payments to households.
• B)the consumption of fixed capital.
• C)intermediate goods.
• D)the underground economy.

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Definitions:

Consumer Movement

A social and economic movement that promotes the rights and powers of consumers in relation to the sale and purchase of goods and services.

Collection Agency

A business that pursues payments of debts owed by individuals or businesses.

Debtor

An individual or entity that owes a debt to another individual or entity, referred to as the creditor.

Credit Report

A detailed report of an individual's credit history prepared by a credit bureau, used by lenders to determine creditworthiness.