GDP Data Are Criticized as Being Inaccurate Measures of Economic

question 121

Multiple Choice

GDP data are criticized as being inaccurate measures of economic welfare because:

• A) they do not take into account changes in the amount of leisure.
• B) they do not take into account changes in product quality.
• C) they do not take into account the adverse effects of economic activity on the environment.
• D) of all of the above considerations.

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Definitions:

Accrual Basis

A bookkeeping approach that logs income and expenses at the time they are accrued, without taking into account the timing of the cash flows.

Cash Basis

An accounting method where revenues are recognized when cash is received, and expenses are recognized when cash is paid out.

Administrative Expenses

Expenses incurred that are not directly tied to a specific function like manufacturing, production, or sales, usually including items like rent, utilities, and management salaries.

Operating Expenses

Costs associated with the day-to-day operations of a business, such as rent, utilities, salaries, and maintenance, but not including cost of goods sold.