Question
3 disadvantages of using GDP to measure national growth
Answers
GPT 3.5
1. Ignores distribution of wealth: GDP only measures the total output of goods and services in a country without considering how that wealth is distributed among its citizens. This means that a high GDP may not reflect the overall well-being of the population if the wealth is concentrated in the hands of a few.
2. Excludes informal economy: GDP does not account for economic activities that occur outside of the formal sector, such as informal employment, bartering, and other unrecorded transactions. This can result in an inaccurate representation of the true economic activity and growth in a country.
3. Does not factor in environmental costs: GDP does not take into account the environmental costs associated with economic growth, such as pollution, resource depletion, and loss of biodiversity. This can lead to unsustainable growth that damages the environment and compromises the well-being of future generations.
2. Excludes informal economy: GDP does not account for economic activities that occur outside of the formal sector, such as informal employment, bartering, and other unrecorded transactions. This can result in an inaccurate representation of the true economic activity and growth in a country.
3. Does not factor in environmental costs: GDP does not take into account the environmental costs associated with economic growth, such as pollution, resource depletion, and loss of biodiversity. This can lead to unsustainable growth that damages the environment and compromises the well-being of future generations.