PRC-3 · Chapter 13 · Question 19 of 50
While GDP is heavily used to measure a country's success, critics argue it is a poor measure of the true 'standard of living'. Which scenario highlights this flaw?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) GDP rising while the environment is destroyed by toxic factory pollution
Explanation
GDP measures output, not well-being. A high GDP might be accompanied by severe pollution, high crime, or extreme inequality, which actually lower the citizens' true quality of life.
More National Income and Its Determination MCQs
- Q21According to aggregate economic theory, what specifically causes the short-run aggregate supply (SRAS) curve to shift to the left?
- Q22Which crucial macroeconomic indicator measures the total market value of all final goods and services produced within the geographic…
- Q23To convert a country's Gross Domestic Product (GDP) into Gross National Product (GNP), an economist must add which specific value?
- Q24A government boasts that GDP grew by 15% this year. However, inflation was also 15%. To evaluate if actual physical production increased…
- Q25When calculating GDP using the Expenditure Approach, economists sum up consumption, investment, government spending, and: