A student researching economics has taken notes:
• GDP measures total economic output of a country • GDP doesn't measure environmental degradation or inequality • Alternative measures include the Human Development Index • Some economists argue for measuring wellbeing, not just output • Bhutan measures "Gross National Happiness"
The student wants to explain limitations of GDP as a measure.
GDP measures the total economic output of a country.
GDP is limited as a measure because it ignores factors like environmental degradation and inequality—prompting alternatives like the Human Development Index and Bhutan's 'Gross National Happiness.'
Some economists argue for measuring wellbeing rather than output.
The Human Development Index offers an alternative to GDP.
Correct Answer: B
Choice B. Ignoring environment and inequality with alternatives shows GDP's limitations.