Final answer:
It is false to say that all other goods are measured in terms of dollars under the composite good convention. While the value of a composite good is often expressed in dollars, goods are not solely measured by this. Instead, their value is relative to the good or service being compared, taking into account both nominal and real terms.
Step-by-step explanation:
The statement that when using the composite good convention all other goods are measured in terms of dollars is false. The composite good convention in economics is a simplifying assumption where one good is singled out and all other goods and services are aggregated into a single 'composite good.' The value of this composite good is often expressed in monetary terms, typically dollars, because economists consider dollars to be fungible. However, it is not correct to say that all other goods are measured solely in terms of dollars; rather, their value is often relative to the quantity and price of the good or service being compared.
For example, when measuring inflation, economists may refer to the dollar cost of a basket of goods at different time periods. These costs are then compared to assess the change in purchasing power of the dollar, which can also be construed as measuring other goods in terms of dollars. Nonetheless, it is important to consider both nominal and real terms when evaluating economic categories such as GDP, government spending, or education spending, because their values may differ when adjusted for inflation.