Question
Environmental Studies Question on Third World Progress
Which one of the following is an incorrect statement in the context of Gross Domestic Product (GDP)?
A
GDP does not measure the sustainability of growth.
B
GDP helps to understand whether economy is growing or contracting.
C
GDP reflects annual trends of inflation and prices of commodities.
D
GDP helps to understand shift in the annual changes in the country's economy.
Answer
GDP reflects annual trends of inflation and prices of commodities.
Explanation
Solution
GDP does not directly reflect annual trends of inflation and prices of commodities. GDP measures the total value of goods and services produced in a country, but inflation and prices are measured separately using indices like the Consumer Price Index (CPI) or the Wholesale Price Index (WPI).