Question

explain and compare the strengths and weakness of GDP and human development index in measuring the economic performance at a company? ​( I want the answer computer typing NOT handwriting)

Answer 1

Gross Domestic Product (GDP) is a monetary type of measurement that measures the market value of all goods and services in an economy in a given period. It is deemed to be used as an indicator of economic development of the country. The major strength of using GDP as an indicator is that it provides a monetary based measure that is easy to compare. The idea behind using GDP is that it correlates with consumption. Nonetheless, it does not capture measures of welfare or well-being, it does not indicate how the wealth is distributed, it does not tell what is being produced, and it also ignores externalities. Thus, an alternative approach is the Human Development Index (HDI) that focuses on people and capabilities and provides a better indicator of a welfare of a society. The three measures that are considered under HDI are health and life expectancy, education, and standard of living measured in terms of per capita income. Since it not only looks at the monetary aspect of measurement, and also includes two other welfare measures HDI is a better indicator for measuring the economic performance of a country.