Author Question: Because GDP does not account for improvements in the quality of goods, the GDP calculation: a. ... (Read 22 times)

vinney12 · **on:** Jun 30, 2018

Because GDP does not account for improvements in the quality of goods, the GDP calculation:
a. tends to overstate the true value of output in the United States.
b. tends to understate the true value of output in the United States.
c. provides an accurate value of output in the United States.
d. provides the best measure of output in the United States.
e. measures the value correctly because price changes always capture the value of quality changes.

Question 2

The idea that higher prices reduce the purchasing power of financial assets and lead to less consumption is known as the:
a. real balances effect.
b. interest rate effect.
c. foreign purchases effect.
d. income effect.
e. aggregate demand effect.