ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Government spending
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Nonmarket activity
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Underground economy
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Quality of life
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Detailed explanation-1: -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-2: -GDP has the following limitations as a measure of economic well-being: It excludes non-market activity such as DIY construction. It doesn’t take into account both positive and negative externalities since they are not included in prices. It doesn’t account of depreciation in capital goods.
Detailed explanation-3: -The exclusion of non-market transactions. The failure to account for or represent the degree of income inequality in society. The failure to indicate whether the nation’s rate of growth is sustainable or not. More items
Detailed explanation-4: -GDP does not incorporate any measures of welfare. GDP only includes market transactions. GDP does not describe income distribution. GDP does not describe what is being produced. GDP ignores externalities. Social Progress Index. 02-Jan-2023