Question 9
National IncomeThe national income figure is limited as a measure of standard of living because the
- A.value of money is constant.
- B.prices of commodities remain stable
- C.working conditions are uniform in all countries.
- D.real composition of output is not fully known.
Show the answer and explanation
Answer: D (real composition of output is not fully known.)
Explanation
National income does not show what is produced (e.g. weapons or consumer goods), so it is an incomplete measure of welfare.