Which of the following is true ?
A) The GDP gap is the difference between actual real GDP and full-employment real GDP.
B) We desire economic growth because it increases the nation's standard of living.
C) Economic growth is measured by the annual percentage increase in a nation's real GDP.
D) Discouraged workers are a reason critics say the unemployment rate is understated.
E) All of the above are true.

Question

Quizplus · Accepted Answer

- A is true as the GDP gap is defined as the difference between the actual real GDP and the potential (full-employment) real GDP.
- B is true as economic growth leads to an increase in the production of goods and services, which can improve the standard of living of a nation's citizens.
- C is true as economic growth is typically measured in terms of the annual percentage increase of a nation's real GDP.
- D is true as discouraged workers are not counted as part of the labor force, which can lead to an understatement of the unemployment rate.

Therefore, all of the above statements are true.

Which of the Following Is True