ECONOMICS
ECONOMIC GROWTH
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Real Income/GDP
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Productive capacity
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Net social welfare
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None of the above
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Detailed explanation-1: -Net economic welfare (NEW) is a concept of a broader measure of economic welfare than gross national product (GNP) as it adjusts GNP by subtracting from it “bads” such as pollution and by adding the value of beneficial nonmarket activities such as leisure time.
Detailed explanation-2: -Economic welfare is usually measured in terms of real income/real GDP. An increase in real output and real incomes suggests people are better off and therefore there is an increase in economic welfare.
Detailed explanation-3: -Leisure time is time not spent at work. The decision-making process of a utility-maximizing household applies to what quantity of hours to work in much the same way that it applies to purchases of goods and services.
Detailed explanation-4: -Limitations of GDP as a Measure of the Standard of Living. While GDP includes spending on recreation and travel, it does not cover leisure time.
Detailed explanation-5: -The gross domestic product is the logical extension of measuring economic growth in terms of monetary expenditures.