Question 1
Related to the
Economics in Practice on p. 437: If the effects of pollution on society as a measure of welfare were included in GDP calculations, the measured level of GDP would most likely
◦ increase.
◦ decrease.
◦ not change.
◦ become negative.
Question 2
One of the flaws of GDP is that it
◦ includes only transactions that take place in formal businesses.
◦ ignores transactions that do not take place in organized markets.
◦ includes measures of the underground economy.
◦ includes measures of changes of life associated with producing output.
