Question 3
waytowharton wrote:
KarishmaB GMATNinja AjiteshArun DmitryFarber ExpertsGlobal5 mikemcgaryI have doubt in Q3 between options B and C.
(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.
I am not clear on why option C is incorrect. Isn't it one possible case of Option B and that too on the lower side. As per option B, not accurate could mean either higher or lower and Option C is talking about lower case which makes sense. Please let me know gap in understanding.
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:
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?
(C) It is usually less than the intrinsic value of those goods and services.
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:
(B) It is not accurately captured by the price of those goods and services.
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!
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23 Apr 2022, 05:44
