Roughly by comparing expenditures with incomes the

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Unformatted text preview: orkers earned incomes that were reported to the government for tax purposes. Roughly, by comparing expenditures with incomes the government statisticians can get an idea of what was produced but not sold. Suppose you paid $1,000 to workers but only sold goods totaling $40. This difference indicates the production of some goods that didn’t end up getting sold. GDP Versus Quality of Life In 2004, the U.S. GDP was more than six times larger than the GDP of France. Does it follow that because Americans live in a country with a higher GDP than the French, Americans are better off than the French? If your answer is yes, then you have made the mistake of equating a higher GDP with being better off or having greater wellbeing. Greater production of goods and services is only one of the many factors that contribute to being better off or possessing greater well-being. Section 2 Measuring GDP 295 11 (286-309) EMC Chap 11 11/17/05 6:06 PM Page 296 Look at the issue on an individual basis. Franklin has $1 million in the ba...
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