Question

which of the following factors that influence well-being are not measured in GDP?

Environmental damage sustained in producing final goods and services

the distribution of income in the economy

useful goods that are produced in the home

all of the above

none of the above

17, the price index which measures inflation using the market basket of goods consumed by the average urban household is the :

CPI

PPI

GDP deflator

CPX inflator

18, the measure of GDP which adjusts for inflation is called:

constant GDP

nominal GDP

real GDP

deflated GDP

19, the official u-3 unemployment rate is measured as

(#of persons unemployed/civilian labor force)*100

(#of persons employed/#of persons unemployed)*100

(#of person unemployed-civilian labor force)*100

(#of persons unemployed/total population)*100

20 the unemployment measure includes discouraged marginally attached and involuntary part-time workers is

u-1

u-2

u-3

u-5

u-6

Answer 1

Solution:

16. GDP measure includes only those factors of the well-being which can be measured, as in which hold some monetary value and which does not involve repetition of any good or service value. This being said, environmental damage sustained in production, distribution of the income, and useful goods produced at home for self consumption are not included in GDP. So, the factors not included in GDP are (C) All of the above.

17. The price index measuring inflation using market basket of goods consumed is the consumer price index. It is measured as value of market basked consumed today by an average consumer divided by the value of market basked consumed in base period, whole multiplied by 100. Thus, correct option is (A) CPI.

18. The measure of GDP adjusting for inflation is called real GDP, as the real GDP is measured based on the prices of base period, which remain unchanged. Hence, any kind of price increase (or any price change) is not accounted for. Thus, correct option is (C) real GDP.

19. Formula for official unemployment rate = (No. of persons unemployed/Labor force)*100

Thus, correct option is (A).

20. The unemployment measure which includes discouraged marginally attached and involuntary part-time workers is U-6, directly by the definition and measurement of U-6 unemployment measure. Thus, correct option is (E) U-6.