Gdp .. Measure of Welfare - 2473 Words

ENPC-EHTP-MBAXIV A MA 1407 : Business Economics in a Global Market Individual Assignment GDP vs. Welfare The Moroccan Example Othmane Bouzoubaa Student ID : MA14 - 016 April – May 2012 This paper emphasis on GDP as an inefficient measure of welfare using arguments from the Moroccan example. MBAXIV A – MA 1407 – Business Economics in a Global Market GDP Welfare – The Moroccan Example Table of Contents 1. 2. 2.1 2.2 2.3 3. 3.1 3.2 4. 5. Introduction .................................................................................................................................... 3 From GDP to Welfare................................................................................................................... 3 GDP†¦show more content†¦Such capital consumption (ranging from 10% in UK and more than 20% in Japan) prevents (at least partially) any rise of GDP from benefiting consumers and only replaces physical capital. Similarly, expenditure on crime prevention and security adds significantly to GDP but only restores a safe environment. Medical expenditure as a result of air and noise pollution also adds to GDP as do diet classes, antidepressants and a sizeable list of other items...i.e. hence comes the notion of the Net Domestic Product as the result of subtracting capital consumption from GDP. Second, GDP measures income produced in a country but not how much of it is received by people in that country. Implicitly speaking, some income may go to foreigners. This is particularly the case in Ireland, which transfers a non negligible 15% of primary income to the rest of the world. On the other side, other countries (Japan and Germany for instance) are net recipients of income from abroad leading to the rise in income of residents outpacing the rise in GDP. Here comes to notion of the Net National Product as the result of subtracting net income receipts from abroad from net domestic product. Third, GDP â€Å"objectively† counts monetary transactions (including estimates for those in the shadow economy) and very often misses many other activities that people â€Å"subjectively† value like caring forShow MoreRelatedThe Problems with Using GDP/GNP as a Measurement to Compare Welfare Between Countries1169 Words   |  5 PagesThe Problems with Using GDP/GNP as a Measurement to Compare Welfare Between Countries National Income is defined as the sum total of all goods and services, i.e. of all incomes produced over a period of time which is normally a year. It examines the level of economic activity of this period. National Income is â€Å"flow† measure because the income of a country flows over a period of time rather than being measured at a special point in time as for example wealth is. HoweverRead MoreThe Limitations of GDP as a Measure of Well Being878 Words   |  4 PagesThe Limitations of GDP as a Measure of Well Being A primary aim of governments economic policy includes economic development and management. The presence of a growing economy is perceived as a positive characteristic; with increasing gross domestic product (GDP) being interpreted as positive sign of social well being (van den Bergh, 2008). Countries with a high GDP have higher taxes paid to government, who may use those taxes to provide public services such as education and health, which in turnRead MoreEvaluation Of The Alternative Of Economic Progress1397 Words   |  6 PagesJohnson September 18, 2015 Evaluation of the Alternatives to GDP in the Measuring of Economic Progress Measuring the success of a country in modern society is very important as it influences future decisions made to improve economy. The main indicator used to measure a country’s success is the Gross Domestic Product (GDP). 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What p roducts (services) are excluded from the GDP computation? Gross domestic product(GDP) is defined as â€Å"the total market value of all final goods and services produced annually within the boundaries of the United States, whether by U.S. or foreign-supplied resources† (McConnell, 2012, p. G11). GDP has limitations when measuring total output and national welfare because it is a monetary value. GDP only counts final goodsRead MoreGdp And Total Expenditure On Purchasing A New Houses Essay904 Words   |  4 Pages1. GDP is the monetary value allocated to all goods and services produced within a given country. This excludes the net income accruing from abroad. GDP can be measured using the total expenditure approach for calculating National Income as a summation of total expenditure on commodities produced in a given economy. Any expenditure on purchasing a new houses is excluded. The final consumption of the government is also included together with all current expenditure. Their expenditure on fixed assetsRead MoreGdp Is the Best Measure of a Countrys Standard of980 Words   |  4 PagesGDP is the best measure of a country’s â€Å"standard of living† Discuss Gross Domestic Product (GDP) is the value of everything produced in the economy for the year. It usually is used to provide economic growth rates and other important data, it is valued in terms of the cost of all inputs. Gross means total; domestic means it applies to everything produced within the economy, product means output. Standard of living refers to the wellbeing of the population, this requires a very wide range of dataRead MoreHow Do Government Deficits And Debt Affect U.s. Economic Welfare?1023 Words   |  5 Pagesquestion evaluated in this annotated bibliography is â€Å"How do government deficits and debt affect U.S. economic welfare?† The research question addressed by this article is how do deficit and debt effect interest rates? The article begins by showing the complexity of measuring these elements do to the business cycle and its effects on the variables. The author proposes the best way to measure deficit and debts effect on interest rates is to take future values for interest rates and the projected amounts