Limitations of GDP as an Economic Indicator
With reference to the money market graph above, which of the following is a known limitation of GDP when used as a comprehensive measure of economic performance?
A
It does not account for the shadow economy and unreported production.
B
It double counts transfer payments, leading to an overestimate of production.
C
It includes non-market transactions that distort total output.
D
It solely reflects government spending, ignoring private consumption.
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