The best reason economists take only final goods and services into account when calculating GDP is that
A) this is the way things have always been done, but there is no particular reason why.
B) they want to avoid the problem of final counting.
C) they want to avoid the problem of double counting.
D) this is the only way it can be done.
C
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Comment on the following statement: "When there are no externalities present, the level of output for a private good produced by a perfectly competitive firm is efficient."
What will be an ideal response?
Lower interest rates motivate:
A. firms to invest less in new factories and working capital. B. firms to invest more in new factories and working capital. C. individuals to spend less on consumption goods. D. individuals to spend less on capital goods.
If there is an improvement in technology that affects only Aggregate Supply and a nation's wealth falls due to a sagging stock market, then:
a. Price index rises, and real GDP falls. b. Price index rises, and the change in real GDP is uncertain. c. Price index falls, and real GDP rises. d. Price index falls, and the change in real GDP is uncertain. e. Price index falls, and real GDP falls.
If we consider the reality that each worker has different skills, then the production possibilities frontier
A. cannot be drawn, as too many variables would need to be taken into consideration. B. would display an increasing opportunity cost of a good as more of that good is produced. C. would display a decreasing opportunity cost of a good as more of that good is produced. D. would display a constant opportunity cost of a good as more of that good is produced.