It is currently 19 Feb 2018, 12:03

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

The Gross Domestic Product (GDP), which measures the dollar

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

5 KUDOS received
BSchool Forum Moderator
avatar
Joined: 23 Jul 2010
Posts: 557
GPA: 3.4
WE: General Management (Non-Profit and Government)
GMAT ToolKit User Premium Member CAT Tests
The Gross Domestic Product (GDP), which measures the dollar [#permalink]

Show Tags

New post 30 Sep 2013, 20:46
5
This post received
KUDOS
6
This post was
BOOKMARKED
Question 1
00:00
A
B
C
D
E

Question Stats:

78% (01:43) correct 22% (01:25) wrong based on 621

HideShow timer Statistics

Question 2
00:00
A
B
C
D
E

Question Stats:

71% (00:33) correct 29% (00:42) wrong based on 605

HideShow timer Statistics

Question 3
00:00
A
B
C
D
E

Question Stats:

61% (00:50) correct 39% (00:45) wrong based on 588

HideShow timer Statistics

Question 4
00:00
A
B
C
D
E

Question Stats:

81% (00:34) correct 19% (00:32) wrong based on 567

HideShow timer Statistics

Question 5
00:00
A
B
C
D
E

Question Stats:

91% (00:30) correct 9% (00:47) wrong based on 555

HideShow timer Statistics

Question 6
00:00
A
B
C
D
E

Question Stats:

79% (03:10) correct 21% (00:59) wrong based on 541

HideShow timer Statistics

Verbal Review Practice Passage
Passage No.: 1
Questions: 1 to 6
Page: 22 & 23

The Gross Domestic Product (GDP), which measures the dollar value of finished goods and services produced by an economy during a given period, serves as the chief indicator of the economic well-being of the United States. The GDP assumes that the economic significance of goods and services lies solely in their price, and that these goods and services add to the national well-being, not because of any intrinsic value they may possess, but simply because they were produced and bought. Additionally, only those goods and services involved in monetary transactions are included in the GDP. Thus, the GDP ignores the economic utility of such things as a clean environment and cohesive families and communities. It is therefore not merely coincidental, since national policies in capitalist and non-capitalist countries alike are dependent on indicators such as the GDP, that both the environment and the social structure have been eroded in recent decades. Not only does the GDP mask this erosion, it can actually portray it as an economic gain: an oil spill off a coastal region “adds” to the GDP because it generates commercial activity. In short, the nation’s central measure of economic well-being works like a calculating machine that adds but cannot subtract.


1. The primary purpose of the passage is to:


(A) identify ways in which the GDP could be modified so that it would serve as a more accurate indicator of the economic well-being of the United States

(B) suggest that the GDP, in spite of certain shortcomings, is still the most reliable indicator of the economic well-being of the United States

(C) examine crucial shortcomings of the GDP as an indicator of the economic well-being of the United States

(D) argue that the growth of the United States economy in recent decades has diminished the effectiveness of the GDP as an indicator of the nation’s economic well-being

(E) discuss how the GDP came to be used as the primary indicator of the economic well-being of the United States


[Reveal] Spoiler: OA
C


2. Which of the following best describes the function of the second sentence of the passage in the context of the passage as a whole?

(A) It describes an assumption about the GDP that is defended in the course of the passage.

(B) It contributes to a discussion of the origins of the GDP.

(C) It clarifies a common misconception about the use of the GDP.

(D) It identifies a major flaw in the GDP.

(E) It suggests a revision to the method of calculating the GDP.


[Reveal] Spoiler: OA
D


3. It can be inferred that the author of the passage would agree with which of the following about the “economic significance” of those goods and services that are included in the GDP?

(A) It is a comprehensive indicator of a nation’s economic well-being.

(B) It is not accurately captured by the price of those goods and services.

(C) It is usually less than the intrinsic value of those goods and services.

(D) It is more difficult to calculate than the economic significance of those goods and services that are not included in the GDP.

(E) It is calculated differently in capitalist countries than in non-capitalist countries.


[Reveal] Spoiler: OA
B


4. The comparison of the GDP to a calculating machine serves to do which of the following?

(A) Refute an assertion that the calculations involved in the GDP are relatively complex in nature

(B) Indicate that the GDP is better suited to record certain types of monetary transactions than others

(C) Suggest that it is likely that the GDP will be supplanted by other, more sophisticated economic indicators

(D) Illustrate the point that the GDP has no way of measuring the destructive impact of such things as oil spills on the nation’s economic well-being

(E) Exemplify an assertion that the GDP tends to exaggerate the amount of commercial activity generated by such things as oil spills


[Reveal] Spoiler: OA
D


5. The passage implies that national policies that rely heavily on economic indicators such as the GDP tend to-

(A) become increasingly capitalistic in nature

(B) disregard the economic importance of environmental and social factors that do not involve monetary transactions

(C) overestimate the amount of commercial activity generated by environmental disasters

(D) overestimate the economic significance of cohesive families and communities

(E) assume that the economic significance of goods and services does not lie solely in the price of those goods and services


[Reveal] Spoiler: OA
B


6. It can be inferred that the author of the passage would agree with which of the following assessments of the GDP as an indicator of the economic well-being of the United States?

(A) It masks social and environmental erosion more fully than the chief economic indicators of other nations.

(B) It is based on inaccurate estimations of the prices of many goods and services.

(C) It overestimates the amount of commercial activity that is generated in the United States.

(D) It is conducive to error because it conflates distinct types of economic activity.

(E) It does not take into account the economic utility of certain environmental and social conditions


[Reveal] Spoiler: OA
E

[Reveal] Spoiler: Question #1 OA
[Reveal] Spoiler: Question #2 OA
[Reveal] Spoiler: Question #3 OA
[Reveal] Spoiler: Question #4 OA
[Reveal] Spoiler: Question #5 OA
[Reveal] Spoiler: Question #6 OA

_________________

How to select your BSchool?
General Mistakes to Avoid on the GMAT
TOP 10 articles on Time Management on the GMAT
Thanks = Kudos. Kudos are appreciated

Rules for posting on the verbal forum


Last edited by hazelnut on 13 Oct 2017, 05:35, edited 8 times in total.
Reformatted question
1 KUDOS received
BSchool Forum Moderator
avatar
Joined: 23 Jul 2010
Posts: 557
GPA: 3.4
WE: General Management (Non-Profit and Government)
GMAT ToolKit User Premium Member CAT Tests
Re: The Gross Domestic Product (GDP), which measures the dollar [#permalink]

Show Tags

New post 07 Oct 2013, 14:43
1
This post received
KUDOS
1
This post was
BOOKMARKED
OE #1 : The passage mainly discusses the limitation of the GDP

OE#2 : Answering 'Evaluation' question requires understanding how a particular part of the passage functions in the passage as a whole. The limitations of the GDP as described in the second sentence are then, in the rest of the passage, tied to problems in the United States.

OE#3 :The author implies that because the GDP ignores the economic utility of certain things,it is not a accurate indicator.

OE#4 :By characterizing the GDP as a calculating machine that cannot subtract, the passage helps illustrate why something like an oil spill is misrepresented by the GDP.

OE #5 : By indicating that the GDP ignores environmental and social factors, the passage implies that policies dependent on the GDP will also ignore these issues.

OE#6 : Author states that the GDP ignores the economic utility of things such as a clean environment and social cohesiveness (lines 13-16)
_________________

How to select your BSchool?
General Mistakes to Avoid on the GMAT
TOP 10 articles on Time Management on the GMAT
Thanks = Kudos. Kudos are appreciated

Rules for posting on the verbal forum

Non-Human User
User avatar
Joined: 01 Oct 2013
Posts: 10321
Premium Member
Re: The Gross Domestic Product (GDP), which measures the dollar [#permalink]

Show Tags

New post 03 Feb 2015, 04:57
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Senior Manager
Senior Manager
User avatar
Joined: 01 Nov 2010
Posts: 281
Location: India
Concentration: Technology, Marketing
GMAT Date: 08-27-2012
GPA: 3.8
WE: Marketing (Manufacturing)
Re: The Gross Domestic Product (GDP), which measures the dollar [#permalink]

Show Tags

New post 03 Feb 2015, 11:50
took 7 Min to solve.

6 right one wrong :(
_________________

kudos me if you like my post.

Attitude determine everything.
all the best and God bless you.

Manager
Manager
User avatar
Joined: 21 Jun 2014
Posts: 143
Location: United States
Concentration: General Management, Strategy
GMAT 1: 630 Q45 V31
GPA: 3.4
WE: Engineering (Computer Software)
Re: The Gross Domestic Product (GDP), which measures the dollar [#permalink]

Show Tags

New post 04 Jul 2015, 21:03
1C 2D 3B 4D 5B 6E All Correct

4 minutes 22 seconds

Regards,
Manish Khare
_________________

Regards,
Manish Khare
"Every thing is fine at the end. If it is not fine ,then it is not the end "

Intern
Intern
avatar
Joined: 07 Oct 2015
Posts: 14
Re: The Gross Domestic Product (GDP), which measures the dollar [#permalink]

Show Tags

New post 18 Jun 2016, 13:55
Can someone please explain why B is the correct answer for question 3?
Intern
Intern
User avatar
Joined: 21 Jul 2016
Posts: 27
GMAT 1: 690 Q50 V31
GMAT 2: 770 Q51 V42
GMAT ToolKit User Reviews Badge
Re: The Gross Domestic Product (GDP), which measures the dollar [#permalink]

Show Tags

New post 21 Sep 2016, 06:42
Key takeaway from this passage is not getting confused with "wrongly adding gain by commercial activity to GDP" v/s over-estimating gains by commercial activity. Gain is added to GDP but nowhere it is written that gain is over estimated. Estimate might very well be accurate, just that it shold not have been added to GDP. So GDP is over estimated in a sense but not the commercial activity by oil spill.
Senior Manager
Senior Manager
User avatar
G
Status: Active
Affiliations: NA
Joined: 23 Oct 2012
Posts: 328
GMAT 1: 590 Q50 V21
GMAT 2: 600 Q48 V25
GMAT 3: 730 Q51 V37
GPA: 3.5
Re: The Gross Domestic Product (GDP), which measures the dollar [#permalink]

Show Tags

New post 01 Oct 2016, 07:51
tanad wrote:
Can someone please explain why B is the correct answer for question 3?


Hi
since this is inference question , we can use POE and also infer from sentences quoted in passage "Thus, the GDP ignores the economic utility of such things as a clean environment and cohesive families and communities. "

3. It can be inferred that the author of the passage would agree with which of the following about the “economic significance” of those goods and services that are included in the GDP?
(A) It is a comprehensive indicator of a nation’s economic well-being.
in the whole passage author was trying to say opposite of this . Eliminate
(B) It is not accurately captured by the price of those goods and services.
Correct . See lines I mentioned :)
(C) It is usually less than the intrinsic value of those goods and services.
can't infer
(D) It is more difficult to calculate than the economic significance of those goods and services that are not included in the GDP.
question is about goods and services included in GDP . Out of scope
(E) It is calculated differently in capitalist countries than in non-capitalist countries.
in passage mentioned it as same in both type of countries
_________________

#If you like my post , please encourage me by giving Kudos :)

Senior Manager
Senior Manager
avatar
G
Joined: 21 Aug 2016
Posts: 300
Location: India
GPA: 3.9
WE: Information Technology (Computer Software)
GMAT ToolKit User Reviews Badge
Re: The Gross Domestic Product (GDP), which measures the dollar [#permalink]

Show Tags

New post 16 Apr 2017, 04:39
Hi Expert,
In question 2, does choice B not indicate that it contributes to a discussion of the definition of the GDP? In the first look of option B in Question 2, it seems that this is the correct choice as the passage started with describing the GDP.

Please help
Expert Post
2 KUDOS received
GMAT Club Verbal Expert
User avatar
S
Joined: 20 Nov 2016
Posts: 243
CAT Tests
Re: The Gross Domestic Product (GDP), which measures the dollar [#permalink]

Show Tags

New post 16 Apr 2017, 15:32
2
This post received
KUDOS
Expert's post
AR15J,

Quote:
In question 2, does choice B not indicate that it contributes to a discussion of the definition of the GDP? In the first look of option B in Question 2, it seems that this is the correct choice as the passage started with describing the GDP.

Choice B specifically states that, "[the second sentence of the passage] contributes to a discussion of the origins of the GDP." Although this sentence does in fact describe aspects of the GDP, the sentence does not contain anything that would contribute to a discussion of the origins of the GDP (ie how or why GDP was first developed and used). Rather, the sentence describes aspects of the GDP that the author believes represent a major flaw in the GDP; thus, choice D is the best fit.
_________________

www.gmatninja.com

Senior Manager
Senior Manager
User avatar
G
Joined: 06 Jul 2016
Posts: 437
Location: Singapore
Concentration: Strategy, Finance
GMAT ToolKit User Premium Member
Re: The Gross Domestic Product (GDP), which measures the dollar [#permalink]

Show Tags

New post 28 Jul 2017, 11:55
Pretty Straightforward Passage. I wish GMAT threw more business passages on the actual exam.

1) C
2) D
3) B
4) D
5) B
6) E
_________________

Put in the work, and that dream score is yours!

Verbal Forum Moderator
User avatar
V
Status: Greatness begins beyond your comfort zone
Joined: 08 Dec 2013
Posts: 1910
Location: India
Concentration: General Management, Strategy
Schools: Kelley '20, ISB '19
GPA: 3.2
WE: Information Technology (Consulting)
GMAT ToolKit User Reviews Badge CAT Tests
Re: The Gross Domestic Product (GDP), which measures the dollar [#permalink]

Show Tags

New post 21 Dec 2017, 05:07
Easy passage . All correct in 8 mins 15 seconds, including 3 mins to read.
_________________

When everything seems to be going against you, remember that the airplane takes off against the wind, not with it. - Henry Ford
The Moment You Think About Giving Up, Think Of The Reason Why You Held On So Long
+1 Kudos if you find this post helpful

Senior SC Moderator
User avatar
D
Joined: 14 Nov 2016
Posts: 1276
Location: Malaysia
GMAT ToolKit User Premium Member CAT Tests
The Gross Domestic Product (GDP), which measures the dollar [#permalink]

Show Tags

New post 17 Feb 2018, 20:53
https://www.theatlantic.com/past/docs/politics/ecbig/gdp.htm

http://altcoopsys.org/2017/12/30/the-atlantic-article-1995-if-gdp-is-up-why-is-america-down/

The Atlantic October 1995

If the GDP is Up, Why is America Down?

Why we need new measures of progress, why we do not have them, and how they would change the social and political landscape

by Clifford Cobb, Ted Halstead, and Jonathan Rowe


This yoking of national accounting to the lowest common denominator of price was to have large implications. It meant that every item of commerce was assumed to add to the national well-being merely by the fact—and to the extent—that it was produced and bought. At the same time, it meant that only transactions involving money could count in the national reckoning. This left out two large realms: the functions of family and community on the one hand, and the natural habitat on the other. Both are crucial to economic well-being. But because the services they perform are outside the price system, they have been invisible in our national accounting.

Long ago this omission was understandable. In Adam Smith's day the portion of life called "the market" occupied a very small part of physical and social space. The habitat seemed to have an infinite supply of resources, and an infinite capacity to absorb such wastes as the industry of the day might dump. The social structure seemed so firmly anchored in history that there was little thought that a growing market could set it adrift.

During this century, however, those assumptions have become increasingly untenable. It is not accidental that both the habitat and the social structure have suffered severe erosion in recent decades; these are precisely the realms that eighteenth- and nineteenth-century assumptions precluded from the reckoning of national well-being—in capitalist and socialist economies alike. This erosion has been mainly invisible in terms of economic policy because our index of progress ignores it; as a result, the nation's policies have made it worse. To understand how the national accounts became trapped in the assumptions of a bygone era, it is useful to study the era in which the current form of economic accounting was wrought.

By itself the GDP tells very little. Simply a measure of total output (the dollar value of finished goods and services), it assumes that everything produced is by definition "goods." It does not distinguish between costs and benefits, between productive and destructive activities, or between sustainable and unsustainable ones. The nation's central measure of well being works like a calculating machine that adds but cannot subtract. It treats everything that happens in the market as a gain for humanity, while ignoring everything that happens outside the realm of monetized exchange, regardless of the importance to well-being.
_________________

"Be challenged at EVERY MOMENT."

“Strength doesn’t come from what you can do. It comes from overcoming the things you once thought you couldn’t.”

"Each stage of the journey is crucial to attaining new heights of knowledge."

Rules for posting in verbal forum | Please DO NOT post short answer in your post!

The Gross Domestic Product (GDP), which measures the dollar   [#permalink] 17 Feb 2018, 20:53
Display posts from previous: Sort by

The Gross Domestic Product (GDP), which measures the dollar

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.