What Is Gdp?

The Gross Domestic Product (gross domestic product) is an economic computation that shows the entirety measure of overall production of a nation. Although there are three different methods of calculating GDP; production, income or use approach, the overall objective is to get an idea of the total sum of goods and services produced by a nation in a set time period. 1 Since GDP is an indicator of a nations economic activity, it has traditionally been used to destine the riches of a nation. It is important to note, however, that economist differ on the definition of what should be spring doed a nations wealth. This paper will outline the different views on wealth of a nation as well as befuddle light on the disadvantages of solely using GDP as the indicator to best gauge a nations wealth. Furthermore, Human Development Index will be proposed as a more appropriate tool to indicate a nations wealth.
In its fundamental form, GDP entirely calculates the care for generated by commercial transactions in a nations economy. There are no commissariat in the calculation method to incorporate the intangibles that most citizens would consider to also add value to a nations wealth. Here lies the difference in opinion among economists on what should be considered a nations wealth.



Things such as the freedom, happiness and national pride never make it into the GDP calculation. However, they can distinguish one nation from another. For instance, even though Venezuelas GDP per capita is 1.5 times Argentinas (See remit 1), Argentina humps intangible benefits of being a representative democracy. Argentinean citizens enjoy certain freedoms that their South American neighbors struggle to obtain. Some economists make the argument that the intangibles, such as freedom, invariable add value to a nations wealth since its citizen can ensnarl in a free market economy. This, in a nutshell, represents the difference in opinion on what constitutes wealth of a nation.
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