Gross Domestic Product (Gdp) Is an Inadequate Measure of Societal Well-Being and Should Be Replaced by the Human Development Index (Hdi)

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

There are many people and businesses that are affected in an inflation. The first being people on a fixed income like the retired that are affected during an inflation because total wealth has lowered it takes more money to pay daily expenses due to lowered value of the dollar. The next group is the creditors, If they do not keep up with the rate of inflation that creditor could lose part or all profit from loans or other forms of debts. The last group is long term contractors, this is mainly due to that long term contracts do not take rates of lower inflations and could cost contractors profits gains due to lowered

For an example, Inflation would go off the charts. Before all of us just cavort on the $15 minimum-wage bandwagon, we should take a glance at what has been going on in New York City. A city known for its bustling, hardworking people. Only 4.6% of people living in New York City are unemployed. Yet even though their minimum wage has been increasing every year they can still barely afford to live in a tiny studio apartment, constantly worrying about their finances just to stay off the streets. The average rent for a two bedroom apartment in Manhattan is $3,895, not to mention they have the highest income tax in our country. Our Inflation Rate is at 2.04%, which is on the rise from 1.64% just last year. The loss of jobs in the states who have been raising their minimum wage have experienced a big stretch of net job losses, Labor Department data show. Obviously losing jobs is definitely not helping the people directly who are losing these jobs but also taking a negative toll onto our economy. A job paying a few dollars less is better than no job at all. Raising minimum wage would increase the separation of upper and middle class. Gaps in the upper, middle and lower classes are growing. The gaps between us consist of family structure, education, and lifestyle. The most concerning gap nowadays is the gap between the lower class struggling to even feed their families and the higher classes who are above thriving. The buying power of the american dollar will mean less and less as this goes on causing things to inevitably cost more and the dollar buys less once again.

GDP, or gross domestic product, is the sum total value of all goods and services produced by a country within a given year. To achieve this sum, everything produced and exported, all of the money spent by consumers and government, investments, and many other contributing factors are calculated and combined. A nation’s GDP is used as the main indicator of the economic status of that nation. In general, the higher a country’s GDP is, the greater the health of that country’s economy. However, GDP is not as helpful or accurate a calculation as “real GDP”. Real GDP is a term that refers

While it provides an indication of how far the economy has come on the long road it is not a direct measure of the nation 's welfare or well-being. GDP measures only output and makes no claims on the quality of that output. GDP lets alone subjective concepts such as social progress or human happiness. It only offers a value of marketed goods and services produced in a country in a given time frame but from the perspective of a citizen living with the day-to-day realities of life, GDP can be rather misleading. Based on that, optimism about national economy remains still limited.

Factors that determine poverty are gross national product, per capita income and industrialization. To broaden the scope of measuring quality of life Human Development Index came into force. It is the summary measure of average achievements in key dimensions of human developments, which illustrates long and healthy life and to have a decent standard of living.

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.

This paper discusses the ideas presented by Richard Wilkinson, in the video How economic inequality harms societies (2011). Three compelling concepts arise from the video which are that there was no longer a correlation between gross national income and health and social problems; it is also possible to attain greater equality as evidenced by what some countries are doing to reduce the income gap; and inequalities vary based on their health impact across the social gradient but nonetheless is present from top to bottom. In order to tackle the health problems and improve the health of individuals within societies, social justice actions geared at the inequalities seen in the healthcare system and other institutions are crucial. This paper also

Unlike our predecessors, the society is now affected by a manifold of dynamics which affect the ways of life and the living standards of people. The change of society has created the need for citizens to be more reliant on the politics of their country, the social conditions of the country, as well as the economic prosperity that may affect where they live. In this report, the living standards of citizens in different countries will be analyzed and shown. From observing the several countries in the world, an analysis will be made to discover what makes the living standards of one country higher than another. Several organizations are already performing this type of research, such as UNICEF; an organization which would rather promote happiness and wellness of citizens in a country rather than only considering the economical factors provided. Instead of solely judging a country by its GDP, or essentially its numerical productivity, there is numerical data for happiness, otherwise known as the Gross National Happiness1. This was created by the King of Bhutan, the leader of a communist country, and the GHP was measured by the social, economic, and political conditions within the country1. Used by major organizations now across the world including UNICEF, I also agree that a country should not only be measured by the economical standards as it is not the only

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.

Pattern and Policy Issues Development literature in the past decade has become more people centric with human development being projected as one of the 'ends' of development planning. The present paper tries to explore the trends, patterns and regional dimension of human development (HD) in India through construction of alternate HD indices for the districts of India. The association between HD indices and conventional measures like per capita income has been explored.

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

MA 1407 : Business Economics in a Global Market Individual Assignment GDP vs. Welfare The Moroccan Example

Detailed analysis of HDI calculation and components involved in the calculation of HDI are presented in the report.