Explain how distribution of gdp is it's limitation in taking measures of economic welfare defend and refut
Answers
Answer:
Most of the limitations are due to the fact that in essence the concept is not supposed to measure well-being. As a result, GDP fails to account for non-market transactions, wealth distribution, the effects of externalities, and the types of goods or services that are being produced within the economy.
Explanation:
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Answer:
There are several limitations of GDP as a welfare indicator. Most of them can be traced back to the fact that in essence GDP is not supposed to measure well-being. As a result the concept does not account for various important factors that influence social welfare. To keep things simple the most relevant limitations are listed below:
GDP does not incorporate any measures of welfare.
GDP only includes market transactions.
GDP does not describe income distribution .
GDP does not describe what is being produced.
GDP ignores externalities.
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