Answered: The use of GDP per head as an indicator…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Production And Growth

Section: Chapter Questions

Problem 1PA

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The use of GDP per head as an indicator of the standard of living and its problems e.g., inequality of income and wealth as an issue (stronger students will refer to Gini-coefficient and Lorenz curves), quality of life, environmental costs, (stronger students will link to market failure) non-market economy, shadow economy etc How economic growth in theory promotes increases in income (stronger students may relate this to the PPF) Alternative conceptions of well-being and the thinking behind these e.g., inclusive development, sustainable development, the HDI, the Sustainable Development Goals

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

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