Briefly describe the different measurements of growth and development. What are the strengths and weaknesses of each approach?
Answers
Answer:
Economists and statisticians use several methods to track economic growth. The most well-known and frequently tracked is the gross domestic product (GDP). Over time, however, some economists have highlighted limitations and biases in the GDP calculation. Organizations such as the Bureau of Labor Statistics (BLS) and the Organization for Economic Co-operation and Development (OECD) also keep relative productivity metrics to gauge economic potential. Some suggest measuring economic growth through increases in the standard of living, although this can be tricky to quantify.
Explanation:
Different methods, such as Gross National Product (GNP) and Gross Domestic Product (GDP) can be employed to assess economic growth.
Gross Domestic Product measures the value of goods and services produced by a nation.
Gross National Product measures the value of goods and services produced by a nation (GDP) and income from foreign investments.
Some economists posit that total spending is a consequence of productive output.