Limitations of GDP- Macro Topic 2.2

What aspect of economics leads some universities to classify it as a STEM major?

• Its focus on social interactions and human behavior.

• Its reliance on historical data and qualitative analysis.

• Its use of applied mathematics and statistics.

• Its ability to make infallible predictions about the future.

Why is GDP per capita considered a more accurate measure of a country's standard of living than nominal GDP?

• It accounts for the total value of all goods and services produced.

• It adjusts for the size of the country's population.

• It includes non-market transactions and environmental costs.

• It reflects the distribution of income among households.

How does environmental pollution, such as an oil spill, impact a nation's Gross Domestic Product (GDP)?

• It decreases GDP because of the damage to natural resources.

• It has no direct impact on GDP as it's an external factor.

• It increases GDP due to the economic activity generated by cleanup efforts.

• It is only factored into GDP if it leads to health issues.

Which of the following economic activities would NOT be included in a nation's Gross Domestic Product (GDP)?

• Purchasing a new car from a dealership.

• Paying for a haircut at a salon.

• Selling homemade crafts at a local market without reporting income.

• Buying groceries from a supermarket.