Gross Domestic Product

5. How are the wealth and productivity of a nation usually measured, and what other factors must be considered when evaluating the well-being of a nation’s people?

-The nation’s GDP is a good measure of its economic well being and progress because it represents the total value of all goods and services produced in an economy, and what a country produces and what it consumes are nearly identical.

14. Explain why a nation’s GDP is both a good and poor measure of its economic well-being and progress?

Gross Domestic Product, also known as GDP, is defined as the dollar value of all final goods and service produced within the border of a country during a specific period of time, typically in one year. GDP measures the value for the whole country, and it also changes quickly. We can take a look at the trends of US GDP in the website of the U.S. Bureau of Economic Analysis.

As the United States moved further away from the immediate economic boom in the final years of the World War and the following several years, its economy showed a major decline. While the country fought one of the biggest wars of all time, defense spending rose to levels as high as 37.8 percent of U.S. gross domestic product (Teslik). World War II was financed through debts and an increase in taxes, and this negatively effected both consumption and investment. Some believed that the war would improve the economy due to the increase in GDP during those years, but at the end of the war, the economic growth fell back to the same trend it had been following during the 1930 's (Institute for Economics and Peace). During the 1960 's, Federal spending soared because the government was attempting to fund new programs such as Medicare, Food Stamps, and various plans to improve the education system (US Department of State). Then, with the war in Vietnam on the horizon, military spending began increasing as well, and the government started spending a surplus of money, since it had to fund both the war on poverty domestically, and the prepare the nation for another war internationally. The government raised taxes throughout the 1950 's and into the 1960 's with income tax rates reaching the high 80% (Top US Tax Rates Over Time, graph). The government was unable to raise enough revenue through taxes, as they had just spent billions of dollars on the Second World War, and inflation

GDP is the market value of all final goods and services produced within a country in a given period of time. GDP is basically the measure of a nation's total income and is an important tool in explaining a single society's economic well-being (Mankiw, 2009).

The GDP per capita is frequently used as a pointer as the average of living for individuals in a specific area, and economic growth means the increase in the average standard of living. Though, there are a few struggles in using the GDP per capita to calculate the general well being. For example: 1- GDP does not provide any information relevant to the sharing of income in a

Economic growth is defined as the rate of growth of the whole income of a nation and is the most efficient indicator of an economy 's health... And wealth.

National income statistics provide us with a numerical comparison of one country’s economic situation with another country’s economic situation. Easily economic

This is due in part because of the unequal wealth distribution. The top one percent of the richest people own forty six percent of the global wealth. This wealth being held by the rich would not be a problem if they were not so selfish with their earnings. The distribution of wealth leads to the subsequent unequal distribution of resources. Some issues this raises are human settlement and population distribution, economic activities, trade and quality of life. Certain indicators can be expended in order to measure a nation’s wealth and they include: Gross Domestic Product (GDP), Gross National Income (GNI) and Human Development Index (HDI). The Gross Domestic Product is the total value of all goods and services. This is a good indicator of what the country is like in relation to their products being sold. The GNI is the GDP plus the income from foreign investors minus the money paid out to foreign investors. The GNI and GDP are not always equal between or within countries. The HDI captures the health, education and income of any given area. It is often a more accurate depiction of what the people are like.

Robert F Keneddy speech on GDP highlighted the unique aspects associated with the understanding of GDP. The speech talked about the meaning and importance of GDP and the misinterpretations that are often attached with the concept. He was of the view that accumulation of material things has remained a main focus of economic agents and doing so community values and community excellence are often compromised. In his speech he presented an important concept that GDP cannot be used as a measure of welfare of wellbeing of the economy because it does not take into account the health of individuals, their standard of living, quality of education provided to the individuals etc. In this way it is not a good option to rely on GDP while having an idea about the development of an economy.

According the to World Bank a countries income level is determined by it’s Gross National Product (GNP) per capita, which is the value of all final goods and services produced in a country in one year (gross domestic product) plus income that residents have received from abroad, minus income claimed by nonresidents divided by its population.("How We Classify Countries,") This measure is an indication of how well the population in a country lives. When comparing country income levels there are several differences that can be found between each group, listed in order of examination they are GNP per capita, political stability, life expectancy, and access to education.

“Godfather of the indicator world” is an expression sometimes used when referring to GDP. This is classed as one of, if not the most, important economic measure, as it provides the best and most accurate indication of economic output. GDP is an aggregate measure of the total economic production for a country. It represents the market value of all goods and services produced by the economy during the measured time period. This includes personal consumption, government spending, private inventories, construction costs and the foreign trade balance. It is predominantly presented

The questions are raised as what and how the wealth is distributed or allocated among societies. Countries with similar average incomes can differ substantially when it comes to people’s quality of life such as social justice, access to education and health care, job opportunities, availability of clean air and safe drinking water, the threat of crime, freedom of speech, life expectancy, birth-death control, identity, culture, conservation, equal opportunities, environmental change. Development is important as it covers a wide range process involving cultural, economic, environmental, political, social and technological change of a country. Regarding goals and means of development, recent United Nations documents emphasize on human development measured by life expectancy, adult literacy, access to all three levels of education as well as people‘s average income which is a necessary condition of their freedom of choice. In other words, human development incorporates all aspects of individuals’ well -being from their health status to their economic and political freedom. The Human Development Report 1996 of UNDP focuses on development as the end and economic growth a

In earlier times Gross Domestic Product was one of the main indicators to measure a country’s wealth. Gross Domestic Product (GDP) is defined as the total value of all the goods and services produced by a nation in any given year ("Is the Gross Domestic Product (GDP) a Good Measure of Prosperity?"). There are two ways of calculating a country’s GDP. The first is the income approach which is calculated by adding the wages of workers, income from rent, interest and profits. The second, more common form of calculating GDP, is the expenditure approach. Here GDP totals consumption expenditure, investment, government spending and net exports. GDP statistics are considered to reflect a county’s economic output which could possibly lead to growth. However GDP is a measure of income and it should not be confused with wealth. Which is why most modern economists do not consider GDP to be a good measure of a