This week’s discussion topic is about Gross Domestic Product (GDP), Per Capita GDP and Quality of...

This week’s discussion topic is about Gross Domestic Product (GDP), Per Capita GDP and Quality of Life. GDP is the market value of all final goods and services produced in an economy in a year. Per Capita GDP is GDP/Population and shows how much of total GDP is theoretically available to each individual in the society. Per Capita GDP is the normal measure of Standard of Living when comparing nations.

Quality of Life has no standard definition. It is broader concept that attempts to embrace the multitude of variables that make people happy. There are many measures of it, but all include GDP and/or Per Capita GDP.

The ultimate question for this week is: “Is GDP a good measure of national economic well being?”

Expert Solution

GDP is a measure or indicator of national economic well being. GDP is the market value of all final goods and services produced in an economy in a year.

GDP basically measures the overall income as well as overall spending on goods and services in the economy. It means that GDP per capita reveals the income and spending nature of an average individual in the home economy. Income and spending are positively related, in other words, with an increase in income, spending patterns also increases. Seeing from the income and spending relationship perspective GDP per capita seems a good measure or indicator of national economic well being as it measures the standard of living.

One thing is clear that the increase in income and spending, in other words, the standard of living does not necessarily mean that quality of life will be increased. This is because an increase in income or GDP does not calculate the health conditions of the children though people can spend a huge amount of money on their health. In brief, quality of life means good health and education acquired, good environmental conditions, a healthy mindset, and relationship, etc. These factors may not be available in the presence of a huge GDP volume. Seeing from this perspective, GDP and GDP per capita cannot be regarded as a good measure or indicator of national economic well being.

After all, it can be summarized that for few, GDP per capita seems a good measure or indicator of national economic well being and for few, it’s not.

Rahul Sunny answered 7 months ago

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