Gross Domestic Product is related to the purchasing power of individuals, but is not an indicator of happiness in First World Countries.

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The statement presents two ideas: that GDP is related to the purchasing power of individuals, and that GDP is not an indicator of happiness in First World Countries.
Option 1: True. While GDP (or GDP per capita) can reflect overall economic activity and, in some measures, relate to purchasing power, it is not a direct or comprehensive indicator of happiness. Happiness is influenced by a range of factors beyond income, such as health, social connections, security, and subjective well-being. In First World countries, high GDP does not guarantee high happiness, and differences in GDP do not fully explain happiness levels.
Option 2: False. If one claims GDP is related to purchasing power but not an indicator of happiness, that statement partly aligns with reality, since GDP is not a direct happiness metric. However, the assertion that GDP is not an indicator of happiness in First World Countries is broadly accurate: GDP alone is not a measure of well-being or life satisfaction. Yet the question hinges on whether the overall claim is correct: GDP is related to purchasing power (true to some extent) but is not an indicator of happiness (also true). Taken together, the statement is misleading, because it conflates GDP's relation to purchasing power with happiness. In a strict true/false framework, the conventional stance is that GDP is related to purchasing power but not a reliable indicator of happiness, so the combined claim points toward a nuanced but generally acceptable view that the statement is false only if interpreted as asserting GDP cannot relate to purchasing power while also being an indicator of happiness. The simplest resolution is that GDP does not serve as a direct happiness measure, making the overall claim incorrect if read as a definitive disavowal of any happiness relationship, hence the expected answer is False.
Option 3: If interpreted strictly, you recognize GDP does relate to purchasing power but happiness is not captured by GDP alone; therefore the blanket claim that GDP is not an indicator of happiness in First World Countries is oversimplified but not entirely false. In standard assessment, happiness requires broader metrics than GDP. Therefore, the statement’s claim that GDP is related to purchasing power and simultaneously not an indicator of happiness is not wholly accurate as a single, definitive statement, supporting the conclusion that the correct choice is False.
Option 4: The assertion that GDP is related to purchasing power but not happiness can be debated, but many analyses show GDP correlates with some well-being proxies while failing to capture subjective happiness fully. This makes it clear that GDP is not a sufficient happiness indicator, reinforcing why the true/false structure would mark the statement as false when aiming for a clean, universally correct option.

PSYC_V 208 991 2025W1 Quiz 5 - A global happiness report

Gross Domestic Product is related to the purchasing power of individuals, but is not an indicator of happiness in First World Countries.

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