Question Details

Real GDP is not a perfect indicator of economic welfare because  



1) Which of the following statements about the comparison between GDP in China and in the
United States is correct?
A) Using the exchange rate to value Chinaʹs GDP in dollars shows that Chinaʹs GDP per
person exceeds the GDP per person in the United States.
B) Using purchasing power parity prices to value Chinaʹs GDP in dollars shows that Chinaʹs
GDP per person exceeds the GDP per person in the United States.
C) Chinaʹs GDP per person is higher using purchasing power parity prices rather than the
exchange rate when valuing Chinaʹs GDP in dollars.
D) None of the above answers are correct because they are all false statements.
2) What we produce during our working time is ________ as part of GDP and the enjoyment we
gain from our leisure time is ________ as part of GDP.
A) included; not included
B) included; included
C) not included; included
D) not included; not included
3) A peak is the
A) lower turning point of a business cycle when an expansion ends.
B) lower turning point of a business cycle when a recession ends.
C) upper turning point of a business cycle when an expansion ends.
D) upper turning point of a business cycle when a recession ends.
4)Real GDP is not a perfect indicator of economic welfare because  ________.
A) it includes the underground economy
B) it includes a direct measure of health and life expectancy
C) it underestimates inflation
D) economic welfare depends on many factors not measured or not measured accurately by
real GDP



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