Which of the following statements regarding GDP is correct?

Question

Quizplus · Accepted Answer

GDP only takes into account the production of goods and services, but it doesn't consider any negative impact on the environment. This means that economic growth may come at the cost of environmental degradation, which is not factored into GDP.

Answer: D 
 While GDP is commonly used as a measure of the size and growth of an economy, it has limitations in terms of providing an accurate picture of well-being. GDP only measures monetary transactions and doesn't account for non-market activities, such as unpaid labor or volunteer work, which may contribute to a society's well-being. Additionally, GDP doesn't reflect the distribution of income, which can greatly impact individuals' quality of life. Therefore, while GDP can provide insights into economic activity, it should be considered alongside other measures when evaluating overall well-being.

B and C are incorrect because they are both untrue statements.

Which of the Following Statements Regarding GDP Is Correct