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23 Apr 2022, 05:44
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saby1410
This is given in the passage:
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,.. Thus, the GDP ignores the economic utility of such things as a clean environment and cohesive families and communities...
The author says that GDP considers that price dictates economic significance and GDP ignores economic utility of think such as clean env etc. So he is complaining that only price may not be an accurate measure of economic significance.
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.
Hence, (B) is perfect.
23 Apr 2022, 05:47
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waytowharton
The author doesn't say whether the intrinsic value is less or more than price. He says that price is the only measure considered while intrinsic value could be different (more or less) depending on the other factors that the product impacts. For example, if producing a product has a huge negative impact on the environment, its actual intrinsic value could be lower than price. On the other hand, if a product helps families stay together, its actual intrinsic value could be higher than its price.
SO option (C) is not correct because the author doesn't say that intrinsic value is usually lower. He just says that price doesn't capture all variables that impact intrinsic value.
07 May 2022, 12:07
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Question 3
waytowharton
Let's start by breaking down the passage.
The author makes the following points about GDP:
- GDP is used to indicate the economic well-being of a country based on the "dollar value of finished goods and services."
- Because it doesn't measure the "intrinsic value" of goods and services, the GDP fails to account for the "economic utility" of things like "a clean environment."
- As an example of this failure, the GDP would register an oil spill as an economic gain, since it "generates commercial activity."
And here's question 3 again:
Quote:
Answer choice (C) suggests that the "economic significance" of goods and services included in the GDP is less than their "intrinsic value." Is that what the passage is saying?
Not really. The passage says that the GDP simply ignores the intrinsic value of goods and services. But that doesn't mean that the "economic significance" of these goods and services is somehow "less than" their "intrinsic value."
From another angle: it doesn't really make sense to directly compare "economic significance" and "intrinsic value" as (C) does. According to the author, the GDP assumes that the "economic significance of goods and services lies solely in their price," as opposed to their "intrinsic value." The author then suggests that by failing to measure the "intrinsic value" of goods and services, the GDP doesn't accurately capture their "economic significance."
But again, that's different than saying that the "economic significance" of goods and services is somehow less than their "intrinsic value." So we can eliminate (C).
Now here's (B) again:
Quote:
This sounds more like what the author is saying. The author points out that the GDP doesn't measure the "intrinsic value" of goods and services. As a result, it ignores the economic utility of a clean environment. As an example of this problem, the author tells us that the GDP would register an oil spill as an economic gain.
So basically, by failing to measure the "intrinsic value" of goods and services, the GDP doesn't really capture their "economic significance." For instance, it would consider an oil spill an economic gain, which is clearly a mistake.
Since (B) lines up nicely with the passage, it's correct.
I hope that helps!
