Difficulties in measuring GDP? Flashcards
Why is the exclusion of real transactions a problem?
Only items that are bought and sold on the market are used - we don’t use things that include cash in hand payments
Why is value of leisure complicated?
We can not measure the value of the satisfaction we get from doing things such as listening to music
Why is the underground economy complicated?
Goods and services are traded without being reported in order to avoid taxes
This can be seen in the black market or illegal goods and services
What are zero priced goods?
They include things such as updates on iCloud or social media
Why is it difficult to measure the value of innovation?
There is no way to put a value on these
Why should we account for inflation?
It is more realistic to compare countries real GDP as it is a more accuracy comparison
What is the acronym for reasons why GDP is difficult to measure?
RULZIM
