Answer to Question #77864 in Microeconomics for Junior

Question

Define Gross Domestic Product (GDP) and discuss the problems associated with GDP as a measure of an economy`s total production.

Answer 1

Gross Domestic Product (GDP) is the monetary value of all finished goods and services produced within the country’s borders during the specific time period.
While being considered an indicator of the country’s welfare, its scope is very limited. For example, it says nothing about the real impact on life quality in a separate country. There is much more to be considered while measuring country’s economic success: life expectancy, state of the environment, etc.