Question

Why GDP cannot be used as welfare index, explain with valuable points?(4 -6 marks)​

Answer 1

Answer:

GDP is an indicator of a society's standard of living, but it is only a rough indicator because it does not directly account for leisure, environmental quality, levels of health and education, activities conducted outside the market, changes in inequality of income, increases in variety, increases in technology.

Answer 2

An increasing GDP is often seen as a measure of welfare and economic success. However, it fails to account for the multi-dimensional nature of development or the inherent short-comings of capitalism, which tends to concentrate income and, thus, power. In this blog post, André Castro and Manish Prasad, make a case for using alternate measures of development such as the Social Progress Index.

An increasing GDP is often seen as a measure of welfare and economic success. However, it fails to account for the multi-dimensional nature of development or the inherent short-comings of capitalism, which tends to concentrate income and, thus, power. In this blog post, André Castro and Manish Prasad, make a case for using alternate measures of development such as the Social Progress Index.“Development can be seen as a process of expanding the real freedoms that people enjoy.” Amartya Sen

An increasing GDP is often seen as a measure of welfare and economic success. However, it fails to account for the multi-dimensional nature of development or the inherent short-comings of capitalism, which tends to concentrate income and, thus, power. In this blog post, André Castro and Manish Prasad, make a case for using alternate measures of development such as the Social Progress Index.“Development can be seen as a process of expanding the real freedoms that people enjoy.” Amartya SenEconomic growth assesses the expansion of a country’s economy. Today, it is most popularly measured by policymaker and academics alike by increasing gross domestic product, or GDP. This indicator estimates the value added in a country which is the total value of all goods and services produced in a country minus the value of the goods and services needed to produce them. It is common to divide this indicator by a country’s population to better gauge how productive and developed an economy is – the GDP per capita

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