GDP figures tend to understate the quantity of goods and services available because:

Question

Quizplus · Accepted Answer

The changes in quality of products are not fully reflected in GDP, which can lead to an understatement of the actual quantity of goods and services available. As products improve in quality and functionality, their prices may stay the same or even drop, which means GDP figures may not accurately reflect the increased value to consumers.

GDP Figures Tend to Understate the Quantity of Goods and Services