Discuss the limitations of GDP as a measurement tool.
Gross Domestic Product (GDP):
Economists define GDP as the dollar value of all the final goods and services produced in the country during a quarter or a year. The formula for GDP is: C(consumption) + I(investment by business) + G(government spending) + eX(ports) - iM(ports).
Answer and Explanation:
GDP focuses on production and income. It doesn't take into account the value of work done by households to improve their property, nor domestic chores and childcare by women at home, nor anything related to happiness and well-being. The country of Bhutan has developed a "Gross National Happiness" Index which attempts to include some of these variables, including the value of leisure and relaxation.
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from CLEP Social Sciences and History: Study Guide & Test PrepChapter 59 / Lesson 2