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GDP tends to _____. rev: 04_09_2018 Multiple Choice overstate economic welfare, because it does not include certain nonmarket activities such as the productive work of housewives understate economic welfare, because it does not take into account increases in leisure understate economic welfare, because it includes expenditures undertaken to offset or correct pollution overstate economic welfare, because it does not reflect improvements in product quality

Respuesta :

Answer:

understate economic welfare, because it does not take into account increases in leisure

Explanation:

While GDP is often used as an index to assess the standard of living of a state or country, there are a number of limitations to this indicator. GDP does not take into account entertainment, health and education costs, off-market operations, nature of the environment etc.

Therefore the second option is correct