Answered: Briefly discuss five reasons why a rise…

Briefly discuss five reasons why a rise in real Gross Domestic Product within a country over time does not necessarily mean that living standards have improved.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Hello. Can you please assist on the follwing question below. You have been appointed chief economist of a small economy of Uhuru. Use the information below which relates to Uhuru in 2020 and answer the questions that follow: National income Accounting Total in uhuru for 2020 Consumption 86 495 Gross capital formation 9 897 Government spending 12 458 Net exports 8 891 Primary income payments to the rest of the world 2 154 Primary income receipts 924 Consumption of fixed capital 165 Subsidies 325 Taxes 467 Q.1 Calculate the gross domestic product (GDP) at market prices for Uhuru in 2020. Q.2 Calculate the net domestic product at market prices for Uhuru in 2020. Q.3 Calculate the net national product at factor cost for Uhuru for 2020.
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Which of the following is a problem with using real gross domestic product (GDP) as a measure of economic well-being? A. It does not account for inflation B. It does not account for production by foreign firms producing inside the domestic economy C. It does not account for the value of services produced in the economy D. It does not account for changes in purchasing power parity. E. It does not account for production within the household
Considering the strengths and weaknesses of GDP as a measure of a nations "well-being," how do you think we should change the way we measure GDP, if we want it to be a better measure of our "well-being?" In other words, nations around the world use GDP as a measure of how well they are doing, and they use changes in GDP as a way to gauge if they are doing better or worse than they were the last time they measured GDP. What specific changes do you think a nation should adopt so that GDP is a better measure of how well-off that nation is? It is not sufficient to write about the problems with the the way GDP is measured; provide your ideas on how - considering those problems - we can make GDP a better measure of how well-off we are. Keep in mind if something is to be included in the GDP, it must be able to be put in monetary units (US dollars, in the case of the US). So if you suggest something should be included, you need to explain how it would be measured (or estimated) in…
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