Question

Please respond to all the questions below:

1. RGDP Definition:  What does real gross domestic product (RGDP) per capita measure? Is there economic production that is not captured in RGDP? Are there non-economic things or conditions that people value that are not captured in RGDP?
   
2. Real GDP Level: Research current and historical levels of RGDP in the US. Use credible Internet or other sources (e.g., government data, national newspapers) and CITE your source. Based on the data you found, what was the RGDP in the US in the most recent year you for which you could find data (in trillions of dollars)?
   
3. RGDP Growth in US: Research data on the recent growth rate of RGDP in the US. Again, please CITE your credible data source. What is the latest RGDP growth rate?
   
4. RGDP per Capita:  Research data on recent RGDP per capita in the US and other countries. CITE your source. Name some countries that have higher RGDP per capita than the US.
   
5. Characterize Economic Growth:  What do you think is the best measure of economic growth? How would you characterize economic growth in the US over the past 30 years?   

Answer 1

Answer 1:

The Real GDP per capita measures the average level of national income which is adjusted for inflation per person. It is an indication of average living standards in an economy. It is given by Real GDP/ Population of the country. Yes, there are various economic activities that is not captured in Real GDP. These are as follows:

a. Black Market : It describes the economic activity based on illegal transactions. It is not captured in the GDP of the nation.

b. Barter: It refers to the transactions in which goods and services are used for payment instead of money. Due to in-kind payments, it is not a part of the GDP of the nation.

c. Unpaid labor - The services that people provide for free is not a part of the GDP of the nation. The three important sources of unpaid labor are professionals, volunteers and home makers.

Some of the non economic things which are not a part of the GDP of the nation include:

a. GDP does not take into consideration the leisure time. The leisure time enjoyed by people is not a part of the GDP of the nation.

b. GDP includes what is spent on environmental protection, healthcare and education but does not include the actual levels of environmental cleanliness, health care and education.

c. It is also silent on the level of inequality in the society.The distribution of the income is not taken into consideration by the GDP value.