Limitations of GDP as an Economic Indicator

Question

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?

Accepted Answer

It does not account for the shadow economy and unreported production.

Answer

It solely reflects government spending, ignoring private consumption.

Answer

It includes non-market transactions that distort total output.

Answer

It double counts transfer payments, leading to an overestimate of production.