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What are the 3 reasons GNP or GDP is insufficient measure of growth and poverty?
Wiki User
∙ 14y ago
1. These aggregates do not measure the distribution of income and final goods and services. A higher GDP can be due to an increase in the income only of the richer section of the economy. The income of the poorer section could even have deteriorated despite a high GDP or GNP.
2. Externalities are ignored in the calculation of GDP. A higher GDP may have resulted in the current year due to unsustainable use of resources during a period.
Wiki User
∙ 14y ago
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