In an economy, the stock market and the
housing market boomed in a given year. The annual stock market turnover reached a record high
of $600 million and the transaction value of the
second-hand property was about $400 million.
All these transaction values were twice the economy’s GDP in that year. To correct this measurement error, it was suggested that $1,000 million
should be added back to the economy’s GDP. Do
the transaction figures reflect a measurement error? Explain your answer.
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