Which of the following is a problem with using real GDP as a measure of economic well-being?
A)It does not account for inflation.
B)It does not account for production within the household.
C)It does not account for production by foreign firms producing inside the U.S.
D)all of the above

Question

Which of the following is a problem with using real GDP as a measure of economic well-being?
A)​It does not account for inflation.
B)​It does not account for production within the household.
C)​It does not account for production by foreign firms producing inside the U.S.
D)​all of the above

Quizplus · Accepted Answer

Real GDP is adjusted for inflation, so it does account for changes in the price level, making choice A incorrect. It includes production within a country's borders, regardless of whether the firms are domestically or foreign-owned, making choice C incorrect. However, real GDP does not account for non-market transactions, such as household production, which is why choice B is correct.

Which of the Following Is a Problem with Using Real