Economics
GDP and Welfare
Practice questions
If prices of environmentally harmful goods rise, the deflator may increase, but what does this not prove?What is a major result of imported consumer goods not being directly included in the GDP deflator?If the price of imported computers falls while the price of domestic computers rises, what provides the main direct effect on the GDP deflator?Why will a rise in the price of a new domestically produced machine purchased by the government be included in the deflator?How does periodic revision of the base year improve the usefulness of the deflator?What may happen to the historical deflator series when the base year is shifted from an old year to a new year?If the quality of a government service improves while staff numbers and costs remain unchanged, what may real-output measurement do?If use of a free artificial-intelligence service rises while its market price remains zero, which limitation of the deflator appears?Why may a simple price comparison overstate inflation when a new good has much better quality than the old product?Why may deflators for earlier years change when a new base year gives greater weight to a rapidly growing service sector?What is the main purpose of linking adjacent years in a chain price index?If the deflator falls while the quality of health and education services also declines, what can be said about welfare?What does GDP mainly measure?Does an increase in GDP always show an equal increase in welfare?Which statement correctly describes the relationship between GDP and welfare?Which of the following is generally not included in GDP?If GDP rises but most of the additional income goes to a few people, what may happen to welfare?How is per capita GDP obtained?Why may welfare fall even when per capita GDP rises?Which of the following is a non-economic indicator of welfare?