COST ACCOUNTING
PERFORMANCE MEASUREMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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whether living standards improved
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employment
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income distribution
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composition of national output
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All of the above!
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Detailed explanation-1: -Real GDP is more reliable in comparing the standard of living across years because real GDP is only affected by changes in production.
Detailed explanation-2: -GDP is important because it gives information about the size of the economy and how an economy is performing. The growth rate of real GDP is often used as an indicator of the general health of the economy. In broad terms, an increase in real GDP is interpreted as a sign that the economy is doing well.
Detailed explanation-3: -Thesis: increases in real GDP improves standard of living Households now have a higher level of purchasing power, which allows them to purchase more goods and services. In addition, since there are more goods and services produced now, there is an increased availability of them for consumption.