Limitations Of GDP

Topic: Limitations of GDP and Economic GrowthThe national income accounts measure productivity, spending, and income; but these accounts were not designed to measure economic welfare. GDP only measures the value of marketed goods and services for a country during a given period. There are also various ways of measuring long term economic growth of a country. There are also several economic and non–economic factors that affect long – run economic growth of countries.1. What are the limitations of the GDP in measuring total output and national welfare? What are the impacts of the shortcomings of the GDP as a measure of the national product and national welfare?2. Discuss aspects of economic welfare ignored in GDP measurement. What products (goods and services) are excluded from the GDP computation?3. What factors might contribute to a low growth rates in a country? Why might growth rates of developed countries be lower than those of developing countries?

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