13. What is true about gross domestic product (GDP)?
Answer: B
It is thought to be the single best measure of a society’s economic well-being.
Gross domestic product (GDP) is widely recognized as a comprehensive indicator of a nation's economic performance and well-being. It reflects the total value of all goods and services produced over a specific time period, making it a crucial metric for assessing economic health.
A) Its year-to-year change as a percent represents the inflation rate.
This statement is incorrect as the year-to-year change in GDP reflects economic growth or contraction, not the inflation rate. The inflation rate is specifically measured by changes in price levels, often assessed through separate indices such as the Consumer Price Index (CPI).
B) It is thought to be the single best measure of a society’s economic well-being.
This statement is correct. GDP is often considered the most reliable measure of a society's economic well-being because it encapsulates the overall economic activity and productivity within a country, serving as a benchmark for comparing economic performance over time and across different nations.
C) It includes the income of citizens working abroad.
This statement is incorrect because GDP measures only the value of goods and services produced within a country's borders, regardless of who produces them. The income of citizens working abroad would be included in gross national product (GNP), not GDP.
D) It places a heavier weight on intangible services than tangible goods.
This statement is misleading. While GDP accounts for both tangible goods and intangible services, it does not inherently place a heavier weight on one over the other. The contributions to GDP are based on the market value of all goods and services produced, regardless of their nature.
Conclusion
In summary, option B is definitively correct as it accurately reflects the consensus that GDP serves as a key indicator of economic well-being. The other options fail to capture the essence of GDP's measurement or misrepresent its components, making them less valid in the context of the question.