How useful is GDP as a measure for countries' well-being and why? What othermeasures could be included in comparing well-being across countries? If you were todesign an index to measure well-being in a country, what factors would you includein the index?

Gross Domestic Product (GDP) is referred to the well-being of the economy. GDP identifies over the…

Answered: How useful is GDP as a measure for…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter19: The Macroeconomic Perspective

Section: Chapter Questions

Problem 20CTQ: U.S. macroeconomic data are among the best in the world. Given what you learned in the Clear It Up...

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Similar questions

U.S. macroeconomic data are among the best in the world. Given what you learned in the Clear It Up 'How do statisticians measure GDP?', does this surprise you, or does this simply reflect the complexity of a modern economy?
Would you usually expect GDP as measured by what is demanded to be greater than GDP measured by what is supplied, or the reverse?
What are typical GDP patterns for a high-income economy like the United States in the long run and the short run?
Cross country comparisons of GDP per capita typically use purchasing power parity equivalent exchange rates, which are a measure of the long run equilibrium value of an exchange rate. In fact, we used PPP equivalent exchange rates in this module. Why could using market exchange rates, which sometimes change dramatically in a short period of time, be misleading?
What are the two main difficulties that arise in comparing different comparing GDP?
Last year, a small nation with abundant forests cut down 200 worth of trees. It then turned 100 worth of trees into 150 worth of lumber. It used 100 worth of that lumber to produce $250 worth of bookshelves. Assuming the country produces no other outputs, and there are no other inputs used in producing trees, lumber, and bookshelves, what is this nations GDP? In other words, what is the value of the final goods the nation produced including trees, lumber and bookshelves?
Why is the GDP deflator not an accurate measure of inflation as it impacts a household?

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How useful is GDP as a measure for countries' well-being and why? What other measures could be included in comparing well-being across countries? If you were to design an index to measure well-being in a country, what factors would you include in the index?