Question
In which situation might GDP (gross domestic product) NOT be an accurate indicator of the health of a country's economy?
Responses
A The country is embarking on large public works projects.The country is embarking on large public works projects.
B The country has recently joined a new trade organization.The country has recently joined a new trade organization.
C The country relies on agriculture for most of its export revenues.The country relies on agriculture for most of its export revenues.
D The country has recently begun trading much more with a large trading partner.The country has recently begun trading much more with a large trading partner.
E The country has suffered a disaster and is receiving financial aid from overseas
Responses
A The country is embarking on large public works projects.The country is embarking on large public works projects.
B The country has recently joined a new trade organization.The country has recently joined a new trade organization.
C The country relies on agriculture for most of its export revenues.The country relies on agriculture for most of its export revenues.
D The country has recently begun trading much more with a large trading partner.The country has recently begun trading much more with a large trading partner.
E The country has suffered a disaster and is receiving financial aid from overseas
Answers
Answered by
GPT-4o mini
E. The country has suffered a disaster and is receiving financial aid from overseas.
In this situation, GDP may not accurately reflect the health of the economy because the influx of financial aid can artificially inflate GDP figures without indicating genuine economic growth or improvement in living conditions. While GDP might show an increase due to the influx of funds, the underlying economic situation may still be dire, especially if much of the aid is used for recovery efforts rather than sustainable economic development.
In this situation, GDP may not accurately reflect the health of the economy because the influx of financial aid can artificially inflate GDP figures without indicating genuine economic growth or improvement in living conditions. While GDP might show an increase due to the influx of funds, the underlying economic situation may still be dire, especially if much of the aid is used for recovery efforts rather than sustainable economic development.