Gross Domestic Product Essay

Document Type:Coursework

Subject Area:Economics

Document 1

To top it up, the black market which runs the economy of some countries – drugs, black money etc are never augmented in the GDP thus underestimating. What are the limitations of the GDP in measuring total output and national welfare? What products (services) are excluded from the GDP computation? GDP per capita maybe used to compare the welfare between different countries and the growth in GDP may be used as an indicator in a progressive society but this isn’t true for: GDP are computed at the market prices and in so doing, so many factors are not in cooperated thus leading to misleading figures. GDP doesn’t include the better of an economy for example the household work. The fact that household work does not form part of GDP makes it difficult to actually come up with the correct figure.

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What are the impacts of the shortcomings of the GDP as a measure of the national product and national welfare? GDP may not be accurate thus offering lies to different countries so as to attract buyers to spend more money on commodities with an assumption that the economy is table and growing while in real sense it is falling. This can be done via accessing capital and deploy it to create a “cloud” of investment or a network of investment that will continue to yield, increase and expand profit both today and in the long-run. Creating a stable government is also an indication of stabilizing the economy. The government will remain accountable and offer to supply some very secure modes of monitory markets that will be helpful in facilitating further expansion of organizations and companies.

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