Topic: Limitations of GDP and Economic Growth
The national income accounts measure productivity, spending, and income; but these accounts were not designed to measure economic welfare. GDP only measures the value of marketed goods and services for a country during a given period. There are also various ways of measuring long term economic growth of a country. There are also several economic and non–economic factors that affect long – run economic growth of countries.
- What are the limitations of the GDP in measuring total output and national welfare? What are the impacts of the shortcomings of the GDP as a measure of the national product and national welfare?
- Discuss aspects of economic welfare ignored in GDP measurement. What products (goods and services) are excluded from the GDP computation?
- What factors might contribute to a low growth rates in a country? Why might growth rates of developed countries be lower than those of developing countries?
Please answer the above questions in a minimum of 150 words.
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