Economy, asked by pratiktelekune6051, 8 months ago

Increases in real GDP are often interpreted as increases in welfare. What are some problems
with this interpretation? Which do you think is the biggest problem with it, and why?

Answers

Answered by Anonymous
5

Answer:

there are four problems with this interpretation

1.distribution of income : if distribution of income tones unequal GDP growth fails to reflect arising social welfare

2.composition of GDP : composition of GDP may not be welfare oriented

3.non monetary exchanges : non monetary exchanges are not recorded to calculate GDP

4.externalities : externalities refers to good and bad impact of an economic activity without paying the price or penalty for that

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