Explain how non monetary exchanges are a limitation in taking gdp as an index of welfare
Answers
The major limitation of GDP as an index of welfare of country is that GNP does not take into account those transactions that are not expressed in monetary terms.Non-monetary exchanges are not considered for the estimation of domestic income. These transactions such as domestic services rendered by house wife, kitchen gardening and a parent teaching her child. It is difficult to ascertain their market value and not rendered for the purpose of earning income. Though these services are rendered for development of a child and welfare of the family, it is not included in the gross national product. Thus, 'non-monetary exchanges' as a limitation of using gross domestic product as an index of welfare of a country.
Hope u like the ans.. Plse Mark me as brainlist mate
many activities in an economy are not evaluated in monetary terms like services of housewife a teacher teaching her own child are not included in GDP due to non availability of data such activities influence economic welfare does non monetary exchanges are limitation in taking domestic product as an index of welfare. thank you......please mark it as brainiest.........