Limitations Of Using GDP To Compare Living Standards

Question 1

1. Income distribution

Answer 1

Gdp per capita does not account for income inequality
-doesn’t account for social cohesions
- so a country with a rising gdp may still have problems such as crime and poverty

Question 2

2. Non-market activities

Answer 2

Gdp excludes non-market activities like household labour and informal economies, leading to an incomplete picture of living standards

Question 3

3. Quality of life

Answer 3

Gdp does not measure factors such as healthcare, education, environmental quality, and overall well- being

Question 4

What are other limitations of using gdp?

Answer 4

Gdp data is also not necessarily accurate
Real gdp is still an average - doesn’t take into account factors which effec living standards