Question

Which is the biggest pitfall of economic indicators?

Answer 1

Answer:

All indicators measure an object or field of interest, per se. Hence, a significant reason for misinterpretation occurs when indicators are used for a scope wider than intended. A prominent example might be GDP, which still is used by some policy actors as a measurement for the overall wellbeing of a nation.

Another reason for the misinterpretation of an indicator is that the assumptions about a direction of the indicator by the indicator are wrong. For example, greenhouse gas emissions are a very important green economy indicator, but emissions can decrease for various reasons - and not all of them are indications of progress in the transition towards green economy. Also, increasing environmental tax revenue could be automatically perceived as positive but it may well be due to (taxed) rising pollution, indicating that a potentially existing environmental policy is not achieving its aims. These misinterpretations are referred to as pitfalls.

Answer 2

Answer:

The economic indicator are a valuable resource for any country as the heps ito asses te standards of the country in terms of the level of development and the asses the net growth and the gross output of the county.

Explanation:

• But they at times be disadvantageous to the nations as items of the lack of competitive innovation, and some indicators are inefficiency to measure the changes in the output, as this inefficiency comes from the government sides as the markets become competitive and the indicators are not updated according to the standards of the nations.

• Like the production is a common standard of the govt and any inefficient on the part of the government agency to correctly represent this factor can lead to a strong bias of the country in most the ranking in the world order and hence prove fatal for the policy formulation by the future governments.

• The fluctuation in the prices, GDP and the taxes of the products and the fluctuations in the supply and demand rates have a significant impact on the economic value of a  place and have indirect relations to the other neighboring countries.