Topic 1: GDP and Its Limitations
The national income accounts measure productivity, spending, and income; but these accounts were not designed to measure economic welfare. GDP only measures the value of marketed goods and services for a country during a given period of time. Goods and services that are not sold in markets, such as food produced and consumed at home and household articles, are not included in GDP. Discuss aspects of economic welfare ignored in GDP measurement.
A. What are the limitations of the GDP in measuring total output and national welfare?
B. What products (goods and services) are excluded from the GDP computation?
C. What are the impacts of the shortcomings of the GDP as a measure of the national product and national welfare?
Topic 2: Factors Determining Economic Growth
There are various ways of measuring long term economic growth of a country. There are also a number of economic and non-economic factors that affect long-run economic growth of countries.
A. What factors might contribute to a low growth rates in a country?
B. Compare growth rates across countries by visiting The World Bank website (http://data.worldbank.org/indicator). Why do some poor countries experience higher growth rates than developed countries such as the U.S.?
C. Why might growth rates of developed nations be lower than those of poorer countries?
Source: The World Bank. Retrieved from http://data.worldbank.org/indicator