What are the limitations of the GDP?

Answer 1

Although very useful in determining an economy's economic wealth, GDP fails to give an accurate indicator of an economy's well-being. This is because it is a financial measure, and is doesn't consider things such as:

- Leisure: Leisure activities that help people to wind down after the days end. If GDP is high, people are generally going to be working more, and so might have less time to do the things that they love doing.

- Quality time: Just like leisure, if people work all the time they can't spend that time with their family, friends, or engaging in other social activities, and so their quality of life may suffer.

- Environment: A high GDP is a good GDP, until the environmental and ethical aspects begin to get over looked. For example, China, who has a large GDP because of its mass production and factories also suffers from excessive pollution. If factories are going to work harder to produce more goods, and increase GDP, then these areas will suffer.

- Health: On the same note as the environment, when this suffers, the health of the people suffers. So a high GDP may mean that people's lifestyles are being adversely affected.

Essentially, GDP overlooks the non-financial aspects of the economy.

Answer 2

Impact of production on quality of life. Or, "A" for e2020.