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Author Question: Why is GDP only an imperfect valid measure of the value of output produced by an economy? What ... (Read 55 times)

fahad

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on: Jun 30, 2018
Why is GDP only an imperfect valid measure of the value of output produced by an economy?
 
  What will be an ideal response?

Question 2

The fraction of additional income spent on imports is called the marginal propensity to import.
 
  Indicate whether the statement is true or false
Macroeconomics: Principles, Applications and Tools ¦ O'Sullivan, Sheffrin, Perez ¦ 7th Edition
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amandalm

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Reply #1 on: Jun 30, 2018
Answer to Question 1

GDP will miss transactions that do not take place in organized markets, does not include leisure time, and ignores the underground economy. In addition, GDP does not value changes in the environment that arise through the production of output.

Answer to Question 2

TRUE


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