The main measure of national economic activity—the gross domestic product (GDP)—simply totals the monetary value of goods and services produced....
GMAT Critical Reasoning : (CR) Questions
The main measure of national economic activity—the gross domestic product (GDP)—simply totals the monetary value of goods and services produced. It ignores social costs such as depletion of natural resources or environmental pollution. Some economists argue that to place a dollar figure on these costs in GDP accounting would be to introduce value judgments into what should remain an objective measure. However, in excluding these costs the GDP already contains an implicit value judgment, valuing them at zero.
Which of the following most accurately states the point toward which the passage is directed?
Passage Analysis:
| Text from Passage | Analysis |
| The main measure of national economic activity—the gross domestic product (GDP)—simply totals the monetary value of goods and services produced. |
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| It ignores social costs such as depletion of natural resources or environmental pollution. |
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| Some economists argue that to place a dollar figure on these costs in GDP accounting would be to introduce value judgments into what should remain an objective measure. |
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| However, in excluding these costs the GDP already contains an implicit value judgment, valuing them at zero. |
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Argument Flow:
The argument starts by explaining what GDP measures, then shows what it leaves out (environmental costs). It presents the opposing view that including these costs would make GDP subjective, but then counters by showing that excluding them is also a subjective choice.
Main Conclusion:
GDP already contains value judgments because excluding environmental costs means valuing them at zero.
Logical Structure:
The author uses a contradiction strategy - showing that the economists' concern about value judgments is already present in the current GDP system, just in the opposite direction.
Prethinking:
Question type:
Misc - This is asking us to identify the main point or conclusion the author is trying to make in the passage.
Precision of Claims
The key claim is qualitative - about the nature of GDP as containing value judgments whether we include or exclude environmental costs.
Strategy
For this question type, we need to identify what the author's main argument is. Looking at the logical structure: the author sets up GDP, mentions its limitation (ignoring social costs), presents economists' counterargument (that including costs would add value judgments), then delivers the main punch - that GDP already contains value judgments by excluding these costs. The point is to show that the economists' objection doesn't hold water because GDP isn't actually objective.
This choice focuses on GDP's current inability to measure social costs, but the passage isn't primarily about GDP's technical limitations. The author's main point is about the logical inconsistency in economists' reasoning, not about what information GDP contains or lacks.
This perfectly captures the author's main argument. The passage shows that economists are indeed being inconsistent - they oppose including environmental costs because it would introduce value judgments, yet the current system already contains an implicit value judgment by treating these costs as worth zero. This inconsistency is exactly what the author is pointing toward.
This suggests economists don't understand that environmental issues have social costs, but the passage doesn't indicate economists are unaware of these costs. The economists clearly recognize that environmental pollution and resource depletion exist - their objection is about whether to include dollar values for them in GDP calculations.
This proposes excluding goods/services that cause environmental damage, which goes far beyond what the passage discusses. The author isn't suggesting we should exclude certain products from GDP - the discussion is about whether to include the costs of environmental damage.
This claims environmental costs can be measured as objectively as GDP components, but the passage doesn't argue for the objective measurability of social costs. The author's point is that GDP already contains subjectivity, not that we can measure everything objectively.