--%>
Assignment Help - homework help

Limitations of using GDP as an index of welfare

What are the limitations of using GDP as an index of welfare of a country?

A) The N.I. figures provide no indication of the population, skill and resource of the country. Thus the levels of welfare stay low.

B) A higher N.I. might be due to bigger area or due to concentration of some resources in one specific country.

C) N.I. doesn’t consider the level of prices in country. People might be having high income however due to high prices they may not be able to benefit from a high standard of living.

D) High N.I. of a country might be due to big contributions made by few industries.

   Related Questions in Macroeconomics

  • Q : What is substitutes Substitutes : The

    Substitutes: The two goods for which a rise in the price of one good leads to a rise in the demand for another.

    		•
  • Q : Policy proposals influencing market for

    How would your policy proposals influence the market for parking?

    		•
  • Q : Reallocation of resources through budget

    Reallocation of resources: In case, the market economy fails or does not attain the desired social objectives, the government has to interfere via budget and reallocate resources accordingly. Through its budgetary

    		•
  • Q : Principles of macroeconomics Explain

    Explain the concept of “economies of scale” and “increasing returns”.

    		•
  • Q : Backward shifting of incidence tax When

    When firms bear the legal incidence of a tax, this is backward shifted while: (1) firms burden consumers by raising their prices. (2) the tax burden is borne by workers in the form of lower wages. (3) resource suppliers seek higher factor payments to

    		•
  • Q : Equal Marginal advantage law Assume

    Assume that you receive $18 worth of “jollies” (that is, satisfaction, utility or pleasure) from the very first hole of golf played on a particular day, and that your extra jollies from succeeding holes drops $1 for each and every hole played. You should p

    		•
  • Q : Ideas in which organization is involved

    Ideas in which organization is involved: Talking about the growth of any company. There are basically three type of broad ideas in which management of any organization is involved. These are: 1. Corporate Strategy<

    		•
  • Q : Signals that guide economic decisions

    In market economies, what are the signals which guide economic decisions?

    		•
  • Q : Resolving disequilibrium between the

    Assume that you consume bananas and apples, and the marginal utility of the last apple consumed is 6 times the marginal utility of last banana consumed. Though, the price of apples is only 3 times the price of bananas. This disequilibrium among the two goods can be re

    		•
  • Q : Moentary policy a restrictive monetary

    a restrictive monetary policy is designed to shift the

    		•