Question

​Today, the typical American works fewer than 40 hours per week. In​ 1890, the typical American worked 60 hours per week. Would the difference between the real GDP per capita in 1890 and the real GDP per capita today understate or overstate the difference in the​ population's economic​ well-being?

Answer 1

Understates

Step-by-step explanation:

The difference between the real GDP per capita in 1890 and the real GDP per capita today understates the difference in the​ population's economic​ well-being because although it is a given that the higher the GDP is higher the standard of well-being of the population, however the understatement comes from the fact that GDP has a short-coming of failing to include the value of leisure time.

GDP includes exchanges of value. for example if you employ a maid to take care of house chores and pay the maid, that is an exchange of value and will be captured by GDP but will not be captured if you do it yourself, and there are a lot more people doing things themselves today and the population is far more than in 1890