1. gross domestic product

What does GDP stand for?

Gross Domestic Product.

What is the definition of Gross Domestic Product (GDP)?

Market value of all final goods and services produced within a country in a year.

What does GDP measure in an economy?

Total spending, total income, and total output.

What does the Expenditure Approach to measuring GDP include?

Total spending on final goods and services produced within the economy.

What are the four components of GDP according to the Expenditure Approach?

Consumption (C), Investment (I), Government Purchases (G), Net Exports (NX).

What does the Income Approach to GDP measurement entail?

All income earned by households and businesses from producing goods and services.

What is meant by 'value added' in the context of GDP?

The contribution of each firm to production, calculated as revenue minus the cost of intermediate inputs.

What is GDP per capita?

GDP divided by the population, indicating average income per person.

What are some limitations of GDP as a measure of well-being?

It does not account for inequality, non-market activities, environmental degradation, and unpaid work.

How does GDP correlate with living standards?

Higher GDP is associated with higher life satisfaction, better health outcomes, and more education.

Why should GDP not be the sole measure of economic success?

It fails to capture distribution of income, quality of life, and sustainability.

What are alternative frameworks for measuring well-being beyond GDP?

Measures that account for health, education, security, and environmental quality.

What is the primary focus of macroeconomics?

Studying the economy as a whole rather than individual markets.

What is the importance of understanding income distribution in relation to GDP?

Income distribution affects social cohesion, health outcomes, and political stability.

What is the main implication of the circular flow model in economics?

Total spending equals total output equals total income.

What are shadow economies and how do they relate to GDP?

Underground economic activities (like cash jobs) that are not accounted for in GDP measurements.

Why is using GDP alone potentially misleading in policy-making?

It may not reflect true social progress or individual well-being.

What can policymakers use to complement GDP in assessments?

Inequality measures, health, education statistics, and environmental indicators.

What is the relationship between GDP growth and environmental sustainability?

Current GDP measurements often ignore long-term environmental costs.

How does subjective well-being data provide insights beyond GDP?

It captures aspects of life missed by income statistics, such as happiness and mental health.

What are some key insights regarding the connectivity between GDP growth and lived experiences?

GDP growth does not always correlate with improved median wages or job security for individuals.

What are significant critiques of GDP regarding unpaid work?

GDP ignores unpaid labor such as household work and volunteering.

How does GDP account for environmental degradation?

It can increase due to cleanup efforts, even if well-being decreases.

What are some potential better metrics policymakers could adopt instead of GDP?

Metrics that reflect multi-dimensional well-being, including social, health, and environmental factors.

Why is it crucial to measure well-being through diverse indicators?

It allows for a more holistic understanding of societal health and progress beyond mere economic activity.