Question

The concept of GDP is used by policy makers for many purposes that include keeping track of the growth of our economy and forecasting a recession; but it is also abused by some. Discuss some of the applications of GDP which may be considered improper use or abuse of the concept.

"Even though the Great Recession officially ended, the unemployment rate is still considered high." Discuss.

Discuss how the distribution of income among various groups of income earners have changed in this country during the past 50 years. In your opinion, do we need to initiate any policy to address the distribution of income? Make sure you provide references to any conclusions you arrive at.

Answer 1

The application of GDP which is considered as abuse or misuse is that the measure misses most of what actually make the economic life different between two different countrie.For example the GDP say nothing about the income distribution ,income security ,quality of infastructure ,level of jobs ,quality of public services ,leisure time and balance of paid work.The crudenss of GDP also enders the historical comparisons of nation totaly useless.Like , the central bureau says that real mdeian hoseholds of american income was lower in the year 2013 than in 1989 which reflects the weakness of the measure and not the reality.The GDP only focus or captures a small portion of american great gain from the internet and much lower pollution level ,year of additinal life expectancy .It also misses the damage of hgiher level of income inequality .

The great recession has ended oficially ,but the unemployement rate is still very high even after its ends because of the income inequalty as the there is deficiency in the overall demand of economy of US in order to buy all the services , goods produced by the US workers when all the reources are there .Another important factor is immigrantion which is increasing day by day and it is causing a great impact on the employment level of americans .

It is evident from the past 50 years in the US economic that how the issue of ioncome inequality is always addressed but it is not cured properly and it has become the central issue in the race of democratic presidential nominations .Over the past 50 years , the highest earning 20% of the household of US have contributed a larger shae in the total income of the country .Among the top 5% of the households those with having income at least $ 248729 in the year 2018 their share of the income of all US rose from 16% to 23 % from the year 1968 to 2018 respectively .What I feel is that the policy should be debated properly in order to resolve the income distriubtion and a solid change in the income distriubtionor earner is required by the govt. of US .The policy can be to have employement of US citizen first after the foreigners so that more and more earner of US can be provided with prope income .