Chapter 27- Measuring Output
U.S. GDP in 2018 was about a.) $8 trillion. b.) $21 trillion. c.) $890 billion. d.) $30 trillion.
b.) $21 trillion.
(Supposed to be a chart) Refer to the table. (GDP figures are in billions of dollars.) What was real GDP in Year 2? a.) $4,820 billion b.) $4,875 billion c.) $4,911 billion d.) $5,320 billion
c.) $4,911 billion
Personal income will equal disposable income when a.) corporate profits are zero. b.) personal taxes are zero. c.) transfer payments are zero. d.) Social Security contributions are zero.
b.) personal taxes are zero.
(Supposed to be a chart) Refer to the accompanying national income data (in billions of dollars). Gross domestic product is a.) $1,049 billion. b.) $1,079 billion. c.) $1,090 billion. d.) $1,101 billion.
b.) $1,079 billion.
Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5. The current year per-unit prices of these three goods are A = $2, B = $3, and C = $1. Nominal GDP in the current year is a.) $110. b.) $115. c.) $45. d.) $90.
b.) $115.
The National Income and Product Accounts (NIPA) for the U.S. are compiled by the a.) National Bureau of Economic Research. b.) Bureau of Economic Analysis. c.) National Census Bureau. d.) Council of Economic Advisers.
b.) Bureau of Economic Analysis.
The total volume of business sales in our economy is several times larger than GDP because a.) GDP does not take taxes into account. b.) GDP excludes intermediate transactions. c.) GDP grossly understates the value of our annual output. d.) total sales are in money terms and GDP is always stated in real terms.
b.) GDP excludes intermediate transactions.
Which of the following activities is excluded from GDP, causing GDP to understate a nation's well-being? a.) the services of used-car dealers b.) the child-care services provided by stay-at-home parents c.) the construction of new houses d.) government expenditures on military equipment
b.) the child-care services provided by stay-at-home parents
A business buys $5,000 worth of inputs from other firms in order to produce a product. The business makes 100 units of the product and each of them sells for $65. The value added by the business to these products is a.) $5,000. b.) $6,500. c.) $1,500. d.) $1,000.
c.) $1,500.
(Supposed to be a chart) Refer to the accompanying national income data (in billions of dollars). In these data, U.S. GDP is a.) $315 billion. b.) $324 billion. c.) $305 billion. d.) $367 billion.
c.) $305 billion.
(Supposed to be a chart) Assume an economy that makes only one product and that year 3 is the base year. Output and price data for a five-year period are shown in the table. Real GDP for year 5 is a.) $160. b.) $49. c.) $40. d.) $64.
c.) $40.
(Supposed to be a chart) Refer to the accompanying national income data (in billions of dollars). The national income in this economy can be estimated by adding items a.) 1 through 7. b.) 8 through 11. c.) 2 through 7. d.) 1 through 13.
c.) 2 through 7.
In determining real GDP, economists adjust the nominal GDP by using the a.) national productivity index. b.) wholesale (producers') price index. c.) GDP price index. d.) consumer price index.
c.) GDP price index.
Net exports is a positive number when a.) a nation's exports of goods and services are increasing. b.) a nation exports goods and services to other nations. c.) a nation's exports of goods and services exceed its imports. d.) a nation's exports of goods and services fall short of its imports.
c.) a nation's exports of goods and services exceed its imports.
Which of the following is a primary use for national income accounts? a.) to analyze the environmental cost of economic growth b.) to assess the economic efficiency of specific industries in the economy c.) to measure changes in the value of production and income in the economy d.) to determine whether there is a fair and equitable distribution of income in the economy
c.) to measure changes in the value of production and income in the economy
The following are incomes earned but not received by the nation's households, except a.) corporate income taxes. b.) Social Security contributions. c.) transfer payments. d.) undistributed corporate profits.
c.) transfer payments.
(Supposed to be a chart) Refer to the accompanying national income data (in billions of dollars). Net exports are equal to a.) −$155 billion. b.) $288 billion. c.) −$424 billion. d.) $1,483 billion.
c.) −$424 billion.
During the 2007-2009 recession, a.) real GO and real GDP fell by roughly the same amount. b.) real GDP fell by roughly twice the amount that real GO fell. c.) real GDP fell, while real GO remained unchanged. d.) real GO fell by roughly twice the amount that real GDP fell.
d.) real GO fell by roughly twice the amount that real GDP fell.
The "underground economy" is mostly made up of a.) unpaid work. b.) illegal activities. c.) do-it-yourself activities. d.) tax-evasion activities.
d.) tax-evasion activities.
(Supposed to be a chart) Refer to the accompanying data, using year 1 as the base year. All dollars are in billions. Real GDP increased from year 3 to year 4 by approximately a.) $68 billion. b.) $75 billion. c.) $98 billion. d.) $215 billion.
a.) $68 billion.
(Supposed to be a chart) Refer to the accompanying national income data (in billions of dollars). Which items need to be accounted for in going from national income to GDP? a.) 1, 12, and 13 b.) 2, 11, and 12 c.) 13 only d.) 1 and 2
a.) 1, 12, and 13
If nominal GDP in some year is $280 and real GDP is $160, then the GDP price index for that year is a.) 175. b.) 57. c.) 160. d.) 280.
a.) 175.
(Supposed to be a chart) The base year of the price index given in the accompanying table is a.) Year 1. b.) Year 2. c.) Year 3. d.) Year 4.
a.) Year 1.
Which of the following is a final good or service? a.) a haircut purchased by a father for his 12-year-old son b.) fertilizer purchased by a farm supplier c.) diesel fuel bought for a delivery truck d.) Chevrolet windows purchased by a General Motors assembly plant
a.) a haircut purchased by a father for his 12-year-old son
(Supposed to be a chart) Refer to the accompanying national income data. All figures are in billions of dollars. Personal consumption expenditures a.) cannot be calculated. b.) are $231. c.) are $225. d.) are $205.
a.) cannot be calculated.
A price index is a.) the price of a market basket in a given year divided by the price of an identical market basket in a reference year. b.) a comparison of real GDP in one period relative to another. c.) the cost of a market basket of goods and services in a base period divided by the cost of the same market basket in another period. d.) a ratio of real GDP to nominal GDP.
a.) the price of a market basket in a given year divided by the price of an identical market basket in a reference year.
A large underground economy results in an a.) understated GDP. b.) overstated GDP. c.) understated GDP price index. d.) overstated GDP price index.
a.) understated GDP.
Suppose nominal GDP in year 1 was $100 billion and in year 2 it was $260 billion. The general price index in year 1 was 100 and in year 2 it was 180. Real GDP in year 2 was a.) $160 billion. b.) $144 billion. c.) $44 billion. d.) $80 billion.
b.) $144 billion.
The human-created resources that are referred to as "tools" include a.) wireless networks and infrastructure. b.) comprehending how to organize and manage a business. c.) understanding how to fly a plane. d.) researching and developing a new technique for producing electricity.
a.) wireless networks and infrastructure.
Which of the following best defines disposable income? a.) income received by households less personal taxes b.) the before-tax income received by households c.) all income earned by resource suppliers for their current contributions to production d.) the market value of the annual output net of consumption of fixed capital
a.) income received by households less personal taxes
The following are examples of final goods in national income accounting, except a.) lumber and steel beams purchased by a construction company. b.) a tractor purchased by a construction company. c.) a laptop computer purchased by an executive for personal use. d.) a desktop computer purchased by an executive for business use.
a.) lumber and steel beams purchased by a construction company.
Business inventories increase when firms produce a.) more than they sell, and the inventory increase is added to GDP. b.) less than they sell, and the inventory increase is added to GDP. c.) more than they sell, and the inventory increase is subtracted from GDP. d.) less than they sell, and the inventory increase is subtracted from GDP.
a.) more than they sell, and the inventory increase is added to GDP.
If inflows to the capital stock are greater than outflows, then a.) net investment is positive. b.) net investment is negative. c.) depreciation equals gross investment. d.) depreciation is greater than gross investment.
a.) net investment is positive.
(Last Word) One way the BEA could include free products in GDP is by a.) putting a dollar value on the time that users spend using them. b.) adding the total number of Google searches to personal consumption. c.) adding the average number of music downloads per day to personal consumption. d.) including the number of times business and entertainment news is viewed over the Internet in a new GDP category called news. e.) adding the number of free apps downloaded each year to gross investment.
a.) putting a dollar value on the time that users spend using them.
If nominal GDP rises, a.) real GDP may either rise or fall. b.) we can be certain that the price level has risen. c.) real GDP must fall. d.) real GDP must also rise.
a.) real GDP may either rise or fall.
Corporate profits are found by a.) summing corporate income taxes, dividends, and undistributed corporate profits. b.) adding corporate income taxes and dividends and subtracting undistributed corporate profits. c.) subtracting corporate income taxes from the sum of dividends and undistributed corporate profits. d.) summing dividends, undistributed corporate profits, and proprietors' income.
a.) summing corporate income taxes, dividends, and undistributed corporate profits.
"Net foreign factor income" in the national income accounts refers to the difference between a.) the income Americans gain from supplying resources abroad and the income that foreigners earn by supplying resources in the U.S. b.) the value of products sold by Americans to other nations and the value of products bought by Americans from other nations. c.) the value of investments that Americans made abroad and the value of investments made by foreigners in the U.S. d.) the income earned by Americans in the U.S. minus the income earned by foreigners in the U.S.
a.) the income Americans gain from supplying resources abroad and the income that foreigners earn by supplying resources in the U.S.
GDP excludes a.) the market value of unpaid work in the home. b.) the production of services. c.) the production of nondurable goods. d.) positive changes in inventories.
a.) the market value of unpaid work in the home.
Answer this question based on the given information for an economy in some year. I. Dollar value of resource extraction activity = $20 billion II. Dollar value of production activity = $50 billion III. Dollar value of distribution activity = $80 billion IV. Dollar value of final output = $110 billion Gross output for this economy equals a.) $110 billion. b.) $260 billion. c.) $150 billion. d.) an amount that cannot be calculated with the information given.
b.) $260 billion.
(Supposed to be a chart) Refer to the accompanying data. All figures are in billions of dollars. National income is a.) $395. b.) $380. c.) $375. d.) $360.
b.) $380.
(Supposed to be a chart) Refer to the accompanying data. All figures are in billions of dollars. Net domestic product is a.) $395. b.) $380. c.) $375. d.) $360.
b.) $380.
(Supposed to be a chart) Refer to the accompanying national income statistics (in billions of dollars). Net domestic product is a.) $400 billion. b.) $442 billion. c.) $483 billion. d.) $517 billion.
b.) $442 billion.
(Supposed to be a chart) The table contains data for a hypothetical single-product economy. Nominal GDP in year 3 is a.) $100. b.) $450. c.) $225. d.) $150.
b.) $450.
(Supposed to be a chart) Refer to the accompanying national income data (in billions of dollars). Personal income is a.) $621 billion. b.) $656 billion. c.) $705 billion. d.) $716 billion.
b.) $656 billion.
In an economy, the total expenditures for a market basket of goods in year 1 (the base year) were $5,000 billion. In year 2, the total expenditure for the same market basket of goods was $5,500 billion. What was the GDP price index for the economy in year 2? a.) 100 b.) 110 c.) 115 d.) 120
b.) 110
Nominal GDP is less than real GDP in an economy in both year 1 and year 2. In year 3, nominal GDP is equal to real GDP. In year 4, nominal GDP is slightly greater than real GDP. In year 5, nominal GDP is significantly greater than real GDP. Which year is the base year being used to calculate the price index for this economy? a.) 2 b.) 3 c.) 4 d.) 5
b.) 3
The value of transactions in the underground economy is estimated to be about what percentage of GDP in the United States? a.) 2 percent b.) 7 percent c.) 19 percent d.) 25 percent
b.) 7 percent
The agency responsible for compiling the National Income and Product Accounts for the U.S. economy is the a.) Council of Economic Advisers. b.) Bureau of Economic Analysis. c.) National Bureau of Economic Research. d.) Bureau of Labor Statistics.
b.) Bureau of Economic Analysis.
Answer this question based on the given information for an economy in year 1. i. Dollar value of resource extraction activity = $20 billion ii. Dollar value of production activity = $50 billion iii. Dollar value of distribution activity = $80 billion iv. Dollar value of final output = $110 billion Suppose the next year, the dollar value of distribution activity fell to $70 billion, but the other values remained the same. Based on this, we could conclude that from year 1 to year 2, a.) GO and GDP both fell by $10 billion. b.) GO fell by $10 billion, while GDP was unchanged. c.) GDP fell by $10 billion, while GO was unchanged. d.) neither GO nor GDP were affected by the change in distribution activity.
b.) GO fell by $10 billion, while GDP was unchanged.
The value added of a firm is the market value of a.) a firm's output plus the value of the inputs bought from others. b.) a firm's output less the value of the inputs bought from others. c.) the firm's output. d.) the firm's inputs bought from others.
b.) a firm's output less the value of the inputs bought from others.
All of the following are examples of intermediate goods, except a.) flour bought by a bakery. b.) an oven bought by a bakery. c.) office supplies bought by an accounting firm. d.) gasoline bought by a trucking company.
b.) an oven bought by a bakery.
(Supposed to be a graph) Refer to the accompanying graph. The year 2000 must be the a.) year when depreciation or capital consumption equaled zero. b.) base year of the GDP price index. c.) point in time when GDP equaled 100. d.) year when the GDP price index is zero.
b.) base year of the GDP price index.
Real GDP measures a.) current output at current prices. b.) current output at base year prices. c.) base year output at current prices. d.) base year output at current exchange rates.
b.) current output at base year prices.
If prices increased, we need to adjust nominal GDP values to give us a measure of GDP for various years in constant-dollar terms. We refer to that adjustment as a.) inflating GDP. b.) deflating GDP. c.) compounding GDP. d.) indexing GDP.
b.) deflating GDP.
The value of corporate stocks and bonds traded in a given year is a.) included in the calculation of GDP because they contribute to the current production of goods and services. b.) excluded from the calculation of GDP because they make no contribution to current production of goods and services. c.) included in the calculation of net private domestic investment. d.) included in the calculation of gross private domestic investment.
b.) excluded from the calculation of GDP because they make no contribution to current production of goods and services.
GDP is the a.) national income minus all nonincome charges against output. b.) monetary value of all final goods and services produced within the borders of a nation in a particular year. c.) monetary value of all economic resources used in producing a year's output. d.) monetary value of all goods and services, final and intermediate, produced in a specific year.
b.) monetary value of all final goods and services produced within the borders of a nation in a particular year.
The sale of a used automobile would not be included in GDP of the current year because it is a a.) nonmarket transaction. b.) nonproduction transaction. c.) purely financial transaction. d.) private transfer payment.
b.) nonproduction transaction.
National income accountants can avoid multiple counting by a.) including transfer payments in their calculations. b.) only counting final goods. c.) counting both intermediate and final goods. d.) only counting intermediate goods.
b.) only counting final goods.
The largest expenditure component of GDP is a.) government purchases. b.) personal consumption expenditures. c.) gross private domestic investment. d.) net exports.
b.) personal consumption expenditures.
Suppose the base year is in Year 2, and the GDP price index in the previous year, Year 1, is 92.0. This implies that the a.) output in Year 2 was higher than in Year 1. b.) prices in Year 2 were higher than in Year 1. c.) output in Year 2 was lower than in Year 1. d.) prices in Year 2 were lower than in Year 1.
b.) prices in Year 2 were higher than in Year 1.
Government purchases in national income accounts would include payments for a.) Social Security checks to retirees. b.) salaries for current U.S. military officers. c.) public assistance for welfare recipients. d.) unemployment benefits.
b.) salaries for current U.S. military officers.
Gross output (GO) a.) and GDP are equivalent measures of the final output of an economy. b.) sums together the dollar value of economic activity at every stage of production. c.) measures all economic activity leading up to but excluding final output. d.) always equals an amount smaller than GDP.
b.) sums together the dollar value of economic activity at every stage of production.
Historically, real GDP has increased less rapidly than nominal GDP because a.) price indices have not reflected improvements in product quality. b.) the general price level has increased. c.) technological progress has resulted in more efficient production. d.) the general price level has decreased.
b.) the general price level has increased.
Value added by a firm is the market value of the firm's output minus the a.) total wages paid to its employees. b.) value of inputs bought from other firms. c.) profits that the firm's owners earn. d.) total costs of all inputs used.
b.) value of inputs bought from other firms.
(Advanced Analysis) Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5. The current year per-unit prices of these three goods are A = $2, B = $3, and C = $1. If the per-unit prices of the three goods were each $1 in a base year used to construct a GDP price index, then real GDP in the current year is a.) $110. b.) $115. c.) $45. d.) $160.
c.) $45.
(Supposed to be a chart) In the economy described in the table, real GDP for year 3 is a.) $512. b.) $428. c.) $480. d.) $691.
c.) $480.
(Supposed to be a chart) The accompanying table gives price and output data over a five-year period for an economy that produces only one good. If year 2 is the base year, then Real GDP in year 5 is a.) $120. b.) $90. c.) $60. d.) $30.
c.) $60.
(Supposed to be a chart) The accompanying table gives price and output data over a five-year period for an economy that produces only one good. If year 2 is the base year, the price index for year 3 is a.) 120. b.) 125. c.) 133. d.) 150.
c.) 133.
The amount of new output produced per year for both consumption and additions to capital stock is measured by a.) GDP. b.) net investment. c.) NDP. d.) net exports.
c.) NDP.
In an economy experiencing a persistently falling price level, a.) potential GDP will necessarily exceed actual GDP. b.) changes in nominal GDP may either overstate or understate changes in real GDP. c.) changes in nominal GDP understate changes in real GDP. d.) changes in nominal GDP overstate changes in real GDP.
c.) changes in nominal GDP understate changes in real GDP.
GDP does not include which of the following activities? a.) businesses installing anti-pollution equipment b.) households spending to enhance security of their neighborhoods c.) couples remodeling their own homes d.) families eating out in restaurants
c.) couples remodeling their own homes
In an economy, the value of inventories was $75 billion in year 1 and $63 billion in year 2. In calculating total investment for year 2, national income accountants would a.) decrease it by $75 billion. b.) increase it by $63 billion. c.) decrease it by $12 billion. d.) increase it by $138 billion.
c.) decrease it by $12 billion.
The consumption of fixed capital in each year's production is called a.) indirect business taxes. b.) inventory reduction. c.) depreciation. d.) net investment.
c.) depreciation.
The amount of after-tax income received by households is measured by a.) discretionary income. b.) national income. c.) disposable income. d.) personal income.
c.) disposable income.
The two ways of looking at GDP are the a.) output approach and expenditures approach. b.) income approach and saving approach. c.) expenditures approach and income approach. d.) output approach and consumption approach.
c.) expenditures approach and income approach.
Gross domestic product (GDP) measures and reports output a.) as an index number. b.) in percentage terms. c.) in dollar amounts. d.) in quantities of physical units (for example, pounds, gallons, and bushels).
c.) in dollar amounts.
If real GDP declines in a given year, nominal GDP a.) must also be declining. b.) must also be increasing. c.) may either rise or fall. d.) is likely to remain constant.
c.) may either rise or fall.
The GDP price index equals a.) gross private domestic investment less the consumption of fixed capital. b.) gross national product less net foreign factor income earned in the United States. c.) nominal GDP divided by real GDP. d.) real GDP divided by nominal GDP.
c.) nominal GDP divided by real GDP.
Tom Atoe grows fruits and vegetables for home consumption. This activity is a.) excluded from GDP in order to avoid double counting. b.) excluded from GDP because an intermediate good is involved. c.) productive but is excluded from GDP because no market transaction occurs. d.) included in GDP because it reflects production.
c.) productive but is excluded from GDP because no market transaction occurs.
Which of the following is not included in personal consumption expenditures? a.) new furniture and appliances bought by homeowners b.) payments for cable and Internet services to homes c.) purchases of mutual funds by consumers d.) food purchased at supermarkets
c.) purchases of mutual funds by consumers
In comparing GDP data over a period of years, a difference between nominal and real GDP may arise because a.) of changes in trade deficits and surpluses. b.) the length of the workweek has declined historically. c.) the price level may change over time. d.) depreciation may be greater or smaller than gross investment.
c.) the price level may change over time.
National income measures a.) nominal GDP after it has been inflated or deflated for changes in the value of the dollar. b.) the after-tax income of resource suppliers. c.) the total of all sources of private income plus government revenue from taxes on production and imports. d.) the amount of wage, rent, interest, and profits income actually received by households.
c.) the total of all sources of private income plus government revenue from taxes on production and imports.
Subtracting the purchase of intermediate products and supplies from the value of the sales of final products determines the amount of a.) net investment for a business. b.) profit and cost. c.) value added from the economic activity. d.) surplus or deficit from the economic activity.
c.) value added from the economic activity.
GDP in an economy is $11,050 billion. Consumer expenditures are $7,735 billion, government purchases are $1,989 billion, and gross investment is $1,410 billion. Net exports must be a.) +$53 billion. b.) −$47 billion. c.) −$84 billion. d.) −$161 billion.
c.) −$84 billion.
(Supposed to be a chart) Refer to the accompanying national income data. All figures are in billions of dollars. U.S. imports are a.) $26. b.) $16. c.) $24. d.) $14.
d.) $14.
(Supposed to be a chart) Refer to the accompanying national income statistics (in billions of dollars). Personal income is a.) $483 billion. b.) $376 billion. c.) $372 billion. d.) $317 billion.
d.) $317 billion.
A nation's capital stock was valued at $500 billion at the start of the year and $575 billion at the end. Consumption of fixed capital in the year was $35 billion. Assuming stable prices, net investment was a.) $35 billion. b.) $40 billion. c.) $45 billion. d.) $75 billion.
d.) $75 billion.
(Supposed to be a chart) Assume an economy that is producing only one product. Output and price data for a three-year period are shown in the table. If year 2 is chosen as the base year, real GDP for year 1 is a.) $25. b.) $100. c.) $20. d.) $80.
d.) $80.
(Supposed to be a chart) The table contains data for a hypothetical single-product economy. Nominal GDP in year 4 is a.) $320. b.) $450. c.) $225. d.) $800.
d.) $800.
(Supposed to be a chart) Assume an economy that is producing only one product. Output and price data for a three-year period are shown in the table. If year 2 is chosen as the base year, in years 1 and 3 the price index values are a.) 4 and 6, respectively. b.) 6 and 4, respectively. c.) 120 and 100, respectively. d.) 100 and 150, respectively.
d.) 100 and 150, respectively.
If real GDP in a particular year is $80 billion and nominal GDP is $240 billion, the GDP price index for that year is a.) 100. b.) 200. c.) 240. d.) 300.
d.) 300.
(Supposed to be a chart) Assume an economy that makes only one product and that year 3 is the base year. Output and price data for a five-year period are shown in the table. The price index for year 1 is a.) 140. b.) 40. c.) 167. d.) 60.
d.) 60.
(Last Word) The strategy for measuring the value of an economy's output has become more challenging over the past 20 years because a.) it is increasingly difficult to properly account for quality improvements. b.) of the rapid change in Digital Age products like electronics, software, and video games. c.) many Internet products like Google maps and driving directions are provided free of charge. d.) All of these choices are correct.
d.) All of these choices are correct.
(Supposed to be a graph) Refer to the accompanying graph. Which of the following statements is correct based on the information shown? a.) Real GDP must be deflated in each year after 2000 to determine nominal GDP. b.) Nominal GDP must be inflated in each year since 2000 to determine real GDP. c.) Nominal GDP must be deflated in each year before 2000 to determine real GDP. d.) Nominal GDP must be inflated in each year before 2000 to determine real GDP.
d.) Nominal GDP must be inflated in each year before 2000 to determine real GDP.
The gross domestic product (GDP) concept accounts for society's valuation of the relative worth of goods and services by using a.) a measure of physical weight. b.) a measure of volume. c.) a utility measure. d.) a monetary measure.
d.) a monetary measure.
In an economy that is experiencing a shrinking production capacity, a.) gross domestic investment is negative. b.) net private domestic investment is zero. c.) depreciation is negative. d.) depreciation exceeds gross investment.
d.) depreciation exceeds gross investment.
(Supposed to be a graph) Refer to the diagram. The base year used in determining the price indices for this economy a.) cannot be determined from the information given. b.) is some year before 2000. c.) is more recent than 2000. d.) is 2000.
d.) is 2000.
When gross investment is positive, net investment a.) is always zero. b.) must be negative. c.) must be positive. d.) may be either positive or negative.
d.) may be either positive or negative.
An example of intermediate goods would be a.) bricks bought by a homeowner for constructing a patio. b.) sacks of groceries bought by a dentist for his family. c.) a new car bought by a recent college graduate. d.) paper and ink bought by a publishing company.
d.) paper and ink bought by a publishing company.
GDP excludes most nonmarket transactions. Therefore, GDP tends to a.) underestimate the rate of inflation in the economy. b.) overestimate the rate of inflation in the economy. c.) overestimate the amount of production of the economy. d.) underestimate the amount of production in the economy.
d.) underestimate the amount of production in the economy.
