ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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T
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F
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Either A or B
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None of the above
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Detailed explanation-1: -GDP is a misleading measure of national wealth and wellbeing. Many key goods, including peacefulness, environmental protection or family bonding, are not measured in GDP because they do not involve transactions.
Detailed explanation-2: -Cons. GDP does not capture welfare or human well-being. GDP may not be a strong basis to predict economic growth in times of high uncertainty. As international accounting standards are slow to change and require international consensus, GDP is slow to reflect changes in the world.
Detailed explanation-3: -One problem with GDP is that it does not necessarily indicate the economic well-being of a country since activities that are detrimental to the long-term economy (like deforestation, strip mining, over-fishing, murders, terrorism) increase today’s GDP.