GDP and CPI: Tracking the Macroeconomy- End of Chapter Problem Consider the following statement: "GDP has increased by 2% from last year. This is a good indicator of economic well-being, as it represents an average increase in incomes." Why is this statement is misleading? GDP measures output but not income. It doesn't account for price changes. Economic well-being isn't fully reflected in an aggregate measure. GDP, unadjusted, doesn't measure average income.

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GDP and CPI: Tracking the Macroeconomy - End of Chapter Problem
Consider the following statement: "GDP has increased by 2% from last year. This is a good indicator of economic well-being, as
it represents an average increase in incomes."
Why is this statement is misleading?
GDP measures output but not income.
It doesn't account for price changes.
Economic well-being isn't fully reflected in an aggregate measure.
GDP, unadjusted, doesn't measure average income.
Incorrect
Transcribed Image Text:GDP and CPI: Tracking the Macroeconomy - End of Chapter Problem Consider the following statement: "GDP has increased by 2% from last year. This is a good indicator of economic well-being, as it represents an average increase in incomes." Why is this statement is misleading? GDP measures output but not income. It doesn't account for price changes. Economic well-being isn't fully reflected in an aggregate measure. GDP, unadjusted, doesn't measure average income. Incorrect
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