Reference no: EM133408955
Questions:
How can GDP be a misleading measure of well-being?
Please explain thoroughly with explanations and thoughts.
In addition to the first question, please respond to the two posts on the bottom on your thoughts about how you think GDP is a misleading measure of well-being? Do you agree, disagree with this person's post? Why? Please include all of your thoughts and not short explanations.
Case Study:
Post #1 to respond to;
Many key goods, including peacefulness, environmental protection or family bonding, are not measured in GDP because they do not involve transactions. When WW2 occurred, the real GDP of the United States increased dramatically along with the unemployment rate declining to just below 2%. Many experts argue this meant it was a prosperous time for the people living in the U.S., however, the well-being of the U.S. citizens was not considered, making it far from a prosperous time. The sudden dramatic increase in GDP in the U.S. was made up through the production of tanks, ships, planes, war goods, etc. needed for WW2. By 1946, after World War II ended, true prosperity returned to America's economy and the quantity of consumption goods rose over 25% from what it was in 1929.
Post #2 to respond to;
GDP is not an accurate measure of well-being because it does not take into account the situation that the nation is going through, all it accounts for is the money that was brought and circulated through the economy. The reason it was so high and misleading in World War II it was because 40% of the workforce was at war or producing goods they were many productions of war weapons and tanks, but the standard of living for the average person was still below prosperous. The reason it looked so high was because those making money made it even more money but those in the working class stayed relatively the same. Its the same reason that the GDP of the United States was higher when the working standard was 60 hours a week because the average person was bringing in more money, but they were also more miserable at the time so it is not an accurate reflection of living standard.