Management of water polluting oil refinery says that it ensures welfare through its contribution to GDP. Defend or refute the argument of management with respect to GDP as a welfare measure of the economy
Answers
Management with respect to GDP cannot ensure welfare measures of the economy due to the following reasons:
- Management of water polluting oil refineries can't make sure welfare through its contribution to the GDP as the GDP is the limited device for for measuring of general living.
- Societies widespread of residing is kind that is roughly indicated via GDP.
- Environmental qualities, sports done outside the market, growth in variety, leisure, changing inequality of income, exchange in Technology and many others are a number of the elements that aren't without delay accounted by using the GDP.
- As a measure of economic growth the most massive shortcoming of GDP is its inclusion of government pending along other voluntary market transactions.
Answer:
I refute the argument of management with respect to GDP as a welfare measure of the economy
Explanation:
GDP and welfare : Generally, GDP presents the picture of the whole economic system of the economy. But it is not a satisfication of economic welfare GDP and welfare are not related to each other because :
1) Change in Price : If GDP increases due to rise in general price level then, it will not be reliable index of welfare.
2) Rate of population growth : If the rate of population growth is higher, then GDP rate will reduce the per capita availability of goods and services which will affect the economic welfare
3) Distribution of GDP : Increase in GDP may be due to increase in production it may be possible if improvement is not affect with economic welfare.