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GDP (3)

The document discusses the limitations of GDP as an economic indicator, highlighting its failure to account for environmental degradation, income inequality, quality of life, and informal economic activities. It also presents alternative indicators like the Human Development Index, Genuine Progress Indicator, Purchasing Power Parity, and Green GDP, which provide a more comprehensive view of economic and social well-being. Additionally, it touches on how fiscal, monetary, trade, and investment policies can influence GDP.

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kalleshass414
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2 views1 page

GDP (3)

The document discusses the limitations of GDP as an economic indicator, highlighting its failure to account for environmental degradation, income inequality, quality of life, and informal economic activities. It also presents alternative indicators like the Human Development Index, Genuine Progress Indicator, Purchasing Power Parity, and Green GDP, which provide a more comprehensive view of economic and social well-being. Additionally, it touches on how fiscal, monetary, trade, and investment policies can influence GDP.

Uploaded by

kalleshass414
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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│ │ ├── Does not account for the depletion of natural resources or environmental

degradation.
│ │ └── May not reflect the sustainability of economic growth.
│ ├── Income Inequality
│ │ ├── Does not measure the distribution of income or wealth.
│ │ └── High GDP growth may mask significant income disparities.
│ ├── Quality of Life
│ │ ├── Does not account for the quality of life or social well-being.
│ │ └── May not reflect improvements in health, education, or social services.
│ ├── Black Market and Informal Economy
│ │ ├── Does not account for economic activities in the informal or black market.
│ │ └── May underrepresent the true economic activity in a country.

├── Alternative Economic Indicators


│ ├── Human Development Index (HDI)
│ │ ├── Definition: Combines measures of health, education, and income to assess a
country's development.
│ │ └── Use: Provides a more comprehensive view of economic and social well-being.
│ ├── Genuine Progress Indicator (GPI)
│ │ ├── Definition: Adjusts GDP to account for factors like income distribution,
environmental degradation, and non-market activities.
│ │ └── Use: Provides a more accurate measure of economic progress and well-being.
│ ├── Purchasing Power Parity (PPP)
│ │ ├── Definition: Adjusts GDP to account for differences in the cost of living between
countries.
│ │ └── Use: Provides a more accurate comparison of economic well-being across
countries.
│ ├── Green GDP
│ │ ├── Definition: Adjusts GDP to account for environmental degradation and resource
depletion.
│ │ └── Use: Provides a measure of sustainable economic growth.

├── GDP and Economic Policies


│ ├── Fiscal Policy
│ │ ├── Government spending and taxation policies can influence GDP.
│ │ └── Expansionary fiscal policy can boost GDP during economic downturns.
│ ├── Monetary Policy
│ │ ├── Central bank policies on interest rates and money supply can affect GDP.
│ │ └── Lower interest rates can stimulate investment and consumer spending.
│ ├── Trade Policy
│ │ ├── Tariffs, trade agreements, and export/import policies can influence net exports and
GDP.
│ │ └── Free trade policies can boost GDP by increasing exports and reducing costs.
│ ├── Investment Policy

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