In this lesson summary review and remind yourself of the key terms and concepts about the limitations of GDP.
Log in Allan 3 years agoPosted 3 years ago. Direct link to Allan's post “Discussion Question 1: Hi...” Discussion Question 1: Higher incomes and more output does not always equal a higher quality of life for the people experiencing such growth. For example, if more cars own cars, although the peoples' quality of life might be better, there might be more pollution in the air, affecting their health. Discussion Question 2: If the top 10% of wealthy peoples' incomes go up, that would increase the nation's average income but not increase the income of the typical, median household. Discussion Question 3: Happy Planet Index (HPI) is a measure of a nation’s quality of life that includes survey results on happiness, life expectancy at birth, the degree of inequality across society, and the ecological footprint • (6 votes) Liam Mullany 5 years agoPosted 5 years ago. Direct link to Liam Mullany's post “Surely depreciation of ca...” Surely depreciation of capital is more a symptom of low growth rather than something that needs to be measured by GDP? In a growing economy, depreciating capital is replaced. This doesn't have to be directly, it can be replaced with newer technology or by the firm expanding into more profitable sectors. However, I would think that if GDP is increasing, capital investment will be being renewed, and vice versa. Thoughts? • (1 vote) melanie 5 years agoPosted 5 years ago. Direct link to melanie's post “Depreciation of capital i...” Depreciation of capital is a symptom of the fact that things wear down. Whether an economy is growing or not, equipment wears out. Economic growth means that not only is equipment that is wearing out is being replaced, but even more equipment is being added on top of that replacement. (10 votes) jonny12 2 years agoPosted 2 years ago. Direct link to jonny12's post “1. Higher incomes will no...” 1. Higher incomes will not always equal a higher living standards because it highly depends on where you are spending your money and which tax bracket you are in. For example if 30% of your £50,000 annual income is spent on just taxes and an extra 15% is spent on necessity, then you barely got anything left to pay rent on time let alone buy yourself some normal or luxury goods. More outputs will also have the adverse effect on a nation if those goods and services are being purchased too quickly or they are being produced with a neglect on the environment. 2) If majority of the nation's wealth is held by the top 5% earners, then an increase in a nation;s average income will not lead to an increase in the income of the typical, median household. 3) An alternative measure of wellbeing would be the MPI. This is an international measure of acute multidimensional poverty covering over 100 developing countries. It complements traditional monetary poverty measures by capturing the acute deprivations in health, education, and living standards that a person faces simultaneously. • (4 votes) Simbarashe Mawere 5 years agoPosted 5 years ago. Direct link to Simbarashe Mawere's post “Aren't all the indices(in...” Aren't all the indices(indexes) like measures of economic development, not GDP and hence why would they be taken as limitations? • (0 votes) melanie 5 years agoPosted 5 years ago. Direct link to melanie's post “GDP is not, strictly spea...” GDP is not, strictly speaking, a measure of economic development. Its just a measure of how much stuff gets made. Other indices try to take a more holistic approach in measuring economic development, but none is perfect. (4 votes) Norman Southey 3 years agoPosted 3 years ago. Direct link to Norman Southey's post “How come the summary incl...” How come the summary includes many key terms which have never been mentioned in previous lessons? Such as "real GDP", "Human Development Index", "Genuine Progress Indicator", "Happy Planet Index" • (1 vote) ridah.rizvi159 8 months agoPosted 8 months ago. Direct link to ridah.rizvi159's post “these terms have been men...” these terms have been mentioned in the previous videos and hence not re-explained here. (1 vote) Pham Viet Giang 2 years agoPosted 2 years ago. Direct link to Pham Viet Giang's post “Can sb explain what is de...” Can sb explain what is depreciation of capital please and maybe an example • (1 vote) chapisa4367 3 months agoPosted 3 months ago. Direct link to chapisa4367's post “Do higher incomes and mor...” Do higher incomes and more output always equal a higher quality of life for the people experiencing such growth? Explain. Under what circ*mstances would an increase in a nation's average income not lead to an increase in the income of the typical, median household? Choose an alternative measure of well-being and describe what it includes. The Human Development Index (HDI) includes health, knowledge and standard of living. The Genuine Progress Indicator (GPI) includes GDP + environmental and social elements ,such as pollution, crime , volunteerism. • (1 vote) Saloni 2 months agoPosted 2 months ago. Direct link to Saloni's post “Under what circ*mstances ...” Under what circ*mstances would an increase in a nation's average income not lead to an increase in the income of the typical, median household? Ans. 1) Wide income inequality, poverty. • (1 vote) Caryen 2 years agoPosted 2 years ago. Direct link to Caryen's post “1. 50/50. In this video, ...” 1. 50/50. In this video, quality of life is defined by the standard of health, happiness, security, and material comfort of an individual, a group of people, or a nation. A higher income can support people in terms of security and material comfort by purchasing inferior goods such as Tesla and Apple products. By producing more output, consequences such as the waste produced by factories need to be considered to ensure good health of the individual, groups or a nation. 2. Market inflation. 3. Happy Planet Index includes the measurement of quality of life. • (0 votes) 22sabharwalv 3 years agoPosted 3 years ago. Direct link to 22sabharwalv's post “Higher incomes and output...” Higher incomes and outputs do not always equal a higher quality life because those do not account for important factors such as the environment, health, and stress/community, and happiness. • (0 votes)Want to join the conversation?
Ans : It is not always the higher incomes is, the higher quality of life will be. Based on the statistics , even the highest GDP of USA is not the highest quality of life that we could determine. Therefore the total GDP is not the absolute measurement of quality of life.
Ans :
Ans : The Happy Planet Index (HPI) includes location , quality , severity , duration , timing , context , modifying factors , and associated signs and symptoms.
2) Formalisation of non market services like childcare which were previously not counted within the GDP , thus over estimating current GDP.
3) Rebuilding after natural disaster which on the surface may increase GDP but can be extremely challenging for the affected communities.
4) Replacement of depreciated capital treated as creation of new capital, thus increasing GDP but not having an effect on income of households.
If the increase incomes is as a result of goods and services not registered through the government like illegal activity or under the table payments, then the median household is not affected.
The Happy Planet Index measures the well being of people in different. On top of economic factors, they factor in things lie the environment, health, stress, and community.
