GDP and its Limitations.docx - Sincia Brooks-Willetts ECO...

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Sincia Brooks-Willetts ECO 201-OL02 01/31/2021 GDP and its Limitations GDP or Gross Domestic Product by definition is “the total market value of all final goods and services produced during a year by factors of production located within a nation’s borders” (Miller, 20170109, p. 167). In other words, this is the measure of money earned from goods and services produced by a country within a specific time. The purpose of this assignment is to find out about GDP and its limitations. We will also look at the relationship between economic and social well-being in terms of happiness. GDP is essentially is a grading system for a countries economic health and used to estimate the size of the economy and in relation to its growth rate. “Even though GDP is frequently used to capture the well-being of a society, it was never intended to do that, and as a result it leaves out important aspects of well-being like happiness” (Lesson summary: The limitations of GDP (article)). GDP is a concept like many others that has both pros and cons. There are some benefits in using GDP such as its ability to indicate a nation’s economic performance and thus measure the well-being of its people, it has its setbacks. The limitations of GDP include underground economy, environmental abuses, increase in product quality, the exclusion of non-market production and is not a direct measure of human well-being. GDP also does not take into account

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