Is there a better way to measure a country's economic growth?
The Gross Domestic Product (GDP) Level:
The Gross Domestic Product (GDP) level is a concept that measures the total value of the aggregate economic transactions being performed by the market participants within the domestic boundaries of a nation, given the average price level of such activities and keeping other factors constant.
Answer and Explanation:
Several eminent modern economists have argued that it would be unfair and impractical to depend upon the GDP figures of an economy in order to comment and draw conclusion regarding the state of well being in that country since the method to compute the GDP level does not take into account the economic values being generated in the underground economy. In other words, the concept of computing the GDP level does not take into consideration the factors like living standard, happiness, pollution, underground economy, inequality and more such factors which have a direct and close relationship with the state of welfare and development in an economy. In order to counter such problems, several Modern Welfare economists have argued in favor of concepts like gross happiness product (as used in Bhutan), computing the underground economy (unorganized sector) in the mainstream GDP figures in order to receive a much precise level of the well being in the society.
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from CLEP Social Sciences and History: Study Guide & Test PrepChapter 59 / Lesson 2