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).
Considering the strengths and weaknesses of
I was confused about these questions. If someone could help it would be great. Try to keep it between 250-500 words.
GDP of a country estimates all the transactions within the boundary of a country. It is considered as the approximate income for the entire economy in a given period. It focuses on the production of services and goods in the economy but doesn’t involve the quality of life and well-being of the individuals. It is not associated with the different preferences of the consumers. It is a concept of a whole economy. It is a monetary estimation of the market value of production within the economy. Countries all around the world use it as a measure of how well the economy is working. They also use changes in GDP as a gauge of whether they are doing worse or better than they were the last time when GDP was estimated. GDP is considered the best measure of economic growth worldwide despite its several weaknesses. The major limitation of GDP is it does not measure the standard of living and does not account for leisure time. There are also few other methods that are also used sometimes as a measure of economic growth and development. Such measures are GNP, Population Growth, Urbanization, Quality of life, Consumption per capita, etc.
GDP is still used as the better indicator and is considered important as it gives information about the economy’s size and how well the economy is performing. It is also easy to compare the GDP growth rate of different countries to all other development indicators. The rising GDP is associated with the rise in other development indicators. It is also used because it is also easy to quantify the production of services and goods than all other indicators measure the achievements of welfare. As it is a quantitative measure, if any other component is included in GDP then it should also be a quantitative measure so that the aggregate of monetary units can be estimated.
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