Answer to Question #124896 in Macroeconomics for ANURAG

Question

Is GDP a perfect index of economic welfare ? comment.

Answer 1

No

GDP is not a perfect Indicator of economic welfare .

GDP is mostly the measure of output, but not of welfare .

GDP measures the value of goods and services produced for final use.

It is only an approximate gauge because it does not directly account for things like leisure, happiness, prosperity, state of health and education.