Reference no: EM132606405

Read the passage below:

According to the PowerPoint presentation by Erskine S. Walther, gross domestic product (GDP) is the money value of all the final goods and services produced in a year inside the domestic boundaries of an economy. This gives the total expenditure/income/production taking place in the economy; when divided by the population of the country, the per-capita GDP of an economy is produced. Though GDP and GDP per capita are most widely used as an economic prosperity indicator there has been a lot of debate against per-capita GDP as the best measure of social-welfare according to video #1 "Better quality of life". Following just the GDP can sometimes be misleading as illustrated in video #3 "when it comes to quality of life, what matters to you?" There is no perfect measure of economic well-being. 

True, GDP per capita is easy to calculate and seems fair but it doesn't consider a lot of things such as housework (a maid contributes to GDP, a housewife does not), child care (putting children in daycare contributes to GDP, taking care of them at home does not) as illustrated in the article "Is GDP a Good Measure of Economic Well-Being?" written by Gregory Mankiw (p. 480-481). Also, it's hard to compare across countries because GDP is calculated using a country's prices. For instance, a haircut in India costs less than a haircut in America, therefore, ten haircuts in the US contribute more to GDP than haircuts in India. Moreover, GDP is either the market value of all goods and services produced in an economy during a certain period, or all the expenditures in an economy during the same period, or all the income earned in the economy during the same period. As such, the GDP might reflect the level of marketization of the economy, and not necessarily a higher level of living. 

1. Given all of the differences in measurement of the GDP to which the author refer, GDP still a measure that should be calculated and watched?  
2. What is its value?  
3. Can it be compared cross border?