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Why Is Real GDP Not a Good Measure of Average

Question 104

Multiple Choice

Why is real GDP not a good measure of average material living standards?


A) Because it is biased by the changes in the inflation rate.
B) Because it excludes the role of imported goods.
C) Because it does not take into account the size of the population.
D) Because it is sensitive to the base year chosen in its calculation.
E) Because the price level may be changing,which affects what people can afford to buy.

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