Identify which limitation of GDP is relevant to each example. a. The U.S. Department of Commerce reports that a “dead zone” of low oxygen that can kill fish and marine life in the Gulf of Mexico has grown as large as the state of New Jersey. It is the result of agricultural and developed land runoff in the Mississippi River watershed. The limitation in this case is that the shadow economy would add more to GDP in this situation. fish are being double‑counted in GDP. destruction of the environment is not counted. b. The World Bank reports that in 2015 the income share held by the lowest 10% of the U.S. population was 1.7%. The income share held by highest 10% of the population was 30.6%. The limitation in this case is that leisure time does not factor into GDP. GDP ignores distribution of income. the World Bank is not properly valuating the incomes. c. Data from the Pew Research Center shows that one in five U.S. parents are stay‑at‑home moms or dads. The limitation in this case is that nonmarket activities, such as housework, are counted in GDP. nonmarket activities, such as housework, are not counted in GDP. the "shadow economy" is missing from GDP. d. U.S. GDP per person is around 15% higher than Netherlands GDP per person. However, in the United States, people work about 26% more hours than people in the Netherlands. The limitation in this case is that leisure time is not counted in GDP. Netherlands' GDP is limited in nonmarket activity. the Netherlands has a distorted income distribution. e. Most internet searches (86.5%) occur via Google, Google Maps, or Google Images, all of which provide search results for free. The limitation in this case is that prices are equal to the marginal benefits of consumers. prices do not adequately convey the value of internet services like these. prices accurately convey the value of the product.
Identify which limitation of
a. The U.S. Department of Commerce reports that a “dead zone” of low oxygen that can kill fish and marine life in the Gulf of Mexico has grown as large as the state of New Jersey. It is the result of agricultural and developed land runoff in the Mississippi River watershed.
The limitation in this case is that
the shadow economy would add more to GDP in this situation.
fish are being double‑counted in GDP.
destruction of the environment is not counted.
b. The World Bank reports that in 2015 the income share held by the lowest 10% of the U.S. population was 1.7%. The income share held by highest 10% of the population was 30.6%.
The limitation in this case is that
leisure time does not factor into GDP.
GDP ignores distribution of income.
the World Bank is not properly valuating the incomes.
c. Data from the Pew Research Center shows that one in five U.S. parents are stay‑at‑home moms or dads.
The limitation in this case is that
nonmarket activities, such as housework, are counted in GDP.
nonmarket activities, such as housework, are not counted in GDP.
the "shadow economy" is missing from GDP.
d. U.S. GDP per person is around 15% higher than Netherlands GDP per person. However, in the United States, people work about 26% more hours than people in the Netherlands.
The limitation in this case is that
leisure time is not counted in GDP.
Netherlands' GDP is limited in nonmarket activity.
the Netherlands has a distorted income distribution.
e. Most internet searches (86.5%) occur via Google, Google Maps, or Google Images, all of which provide search results for free.
The limitation in this case is that
prices are equal to the marginal benefits of consumers.
prices do not adequately convey the value of internet services like these.
prices accurately convey the value of the product.
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