Day: April 12, 2019

Which of the following explains why the rate of nominal GDP growth is difficult to measure accurately?

It is difficult to account for changes in:

Select ONE answer:

1. purchasing power parity
2. the price level
3. the size of the population
4. unrecorded economic activity

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 4

1. Confuses this measure with GDP at purchasing power parity, which is a component of the HDI.
2. Confuses real and nominal GDP.
3. Confuses nominal GDP with GDP per capita.
4. Correct: A decrease in unrecorded economic activity would imply nominal output has increased whereas there is simply an increase in the proportion of recorded economic activity.

 

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