GDP Assignment Example | Topics and Well Written Essays - 250 words - 1

gross domestic product - Assignment ExampleSubsequently, assuming an increase in the real GDP per person, the rise in the real national GDP would indicate that the standards of living for the citizens has go up too. This is in consideration of the ownership of material things such as shelter, food and clothing which are sound to wellbeing. The increased standard of living could also be as a result of the enhanced security, glide slope to safe water, justice, access to medical care and a safe environment. However, more of these turnouts are more easy obtained by using fewer resources to produce more goods (Mankiw, 2007).The use of GDP as a rate of economic well-being has several limitations. First, it results in changes in quality of products by including new goods that replace sure-enough(a) products. Second, it does not consider the leisure time or how hard people work to produce output thus, alikely to understate change in real income. Third, GDP does not recognize the unde rground delivery (non-market production) involving cash transactions and barter trades conducted outside the recorded marketplaces (Mankiw, 2007). Fourth, GDP ignores the harmful side effects of goods (economic bads) like pollution in its statistics by counting them the same as goods, as well as GDP places no value on the environmental costs of the