2.2 Limitations Of GDP Flashcards
1
Q
Non-Market Transactions
A
Many goods & services provide value, but doesn’t count in GDP
2
Q
What is the Acronym to Remember GDP limitations
A
PIES
3
Q
Population
A
Argentina and Norway have similar GDP, but Argentina have more people which means Argentina people get smaller slices of “pie” than Norway
4
Q
Inequality
A
Can’t assume each household have identical standard of living
5
Q
Environment
A
GDP can’t calculate clean air/ doesn’t take pollution into account
6
Q
Shadow Economy
A
Pie from store= GDP
Buy from friend= Not GDP
7
Q
Issue w/ Happiness Index
A
It is subjective
