Economists often examine GNP to estimate changes in the well being of people. If one only studied GNP, which of the following would lead one to overestimate the true increases in peoples' well being?

Question

Economists often examine GNP to estimate changes in the well being of people. If one only studied GNP, which of the following would lead  one to overestimate the true increases in peoples' well being?

Quizplus · Accepted Answer

Studying only GNP might lead to overestimating the true increases in people's well-being because GNP does not account for production that occurs in the home. If there's a decrease in home production (e.g., more meals eaten out rather than cooked at home), GNP might increase due to higher spending in the economy, even though this doesn't necessarily reflect an actual increase in well-being.

Economists Often Examine GNP to Estimate Changes in the Well