Because GDP does not account for improvements in the quality of goods, the GDP calculation:

Question

Quizplus · Accepted Answer

GDP only measures the monetary value of final goods and services produced in an economy, but it does not account for non-monetary improvements in quality, such as increased safety features on cars or better healthcare services. Therefore, the GDP calculation tends to understate the true value of output in the United States.

Because GDP Does Not Account for Improvements in the Quality