GDP and Economic Well-Being

Review section 3 of the Macroeconomics chapter assigned in 2.1. Learn about the shortcomings of GDP as a measure of well-being. As we will see, GDP is an imperfect measure of happiness as it focuses exclusively on the material well-being of a country's citizens. Factors such as the quality of healthcare, education, and the environment, are not explicitly covered by GDP.

Measurement Problems in Real GDP

There are two measurement problems, other than those associated with adjusting for price level changes, in using real GDP to assess domestic economic performance.