Answer to Question #230328 in Macroeconomics for aqlama

Question

 Robert Kennedy’s remarks about the shortcomings of measures of national output also contained the following: “The Gross National Product includes air pollution and advertising for cigarettes, and ambulances to clear our highways of carnage. It counts special locks for our doors, and jails for the people who break them. GNP includes the destruction of the redwoods and the death of Lake Superior.” List ways that the accounts can be redesigned to incorporate these effects.

Answer 1

The remarks by Robert Kennedy on the national output measures shortcomings suggests that the accounts should be resigned to address these effects by incorporating into the accounts:

• Changes in personal consumption
• Rate of business investments.
• Level of government spending.