Economy is very important for every country. Why is it? It is basically because the World we live in is made up of individual countries which are occupied by the human beings. As the basic needs of the human being are food, clothing and shelter, people are in need of income to finance the purchases of these needs. In order to receive an income, there must be a job which you are getting paid to get it done. Therefore, if the economy of a country is not good, there will not be jobs to offer to the public. Then the people of the country will not be able to fulfil their needs. But how can we know if a country’s economy is good? The answer is to invent something to measure the economy. Economists tried out many different methods time over time.…show more content… This happens when goods are going through various stages while being produced before ending up in a buyer’s hand. Therefore, economists avoid this problem by only including the final value of goods and services in calculating GDP.
Black economy is a hidden economy of a country. They are the unreported cash transactions designed for the tax avoidance purposes. Examples of these are undeclared salaries earned from a second job, most illegal trading such as drug dealing, weaponry, prostitution, etc. All of these are left uncounted while calculating GDP.
This problem occurs when a person who measures the GDP is not performing their job correctly or honestly or the standards they are using are not current to measure the accurate value of GDP.
Gross National Happiness (GNH)
“The concept of gross national happiness (GNH) was developed in an attempt to define an indicator that measures quality of life or social progress in more holistic and psychological terms than gross domestic product (GDP).”
What is happiness? How do we measure happiness? Money stands in this world as an extremely important element. Money is powerful and almost everything can be done if you have money. This is why the developed countries like the United States of America, the United Kingdom and Russia measure the wealth of their economy in GDP because they believe money gives them happiness. However some countries do not do so. Bhutan, a small country in the