logo

GDP as a Measure of Economic Well-Being

6 Pages1381 Words54 Views
   

Added on  2020-05-01

About This Document

The gross domestic product has been used for a long time as a measure of the economic activity of a region or country and many policy makers use it as a benchmark on which to base their decisions. Question 2 Business cycle and its impact of a stock market crash on the business cycle The business cycle is a systematic, irregular upward and downward movement in economic activity measured by changes in various macroeconomic variables and the gross domestic product (GDP).

GDP as a Measure of Economic Well-Being

   Added on 2020-05-01

ShareRelated Documents
Economic Assignment 1Economic AssignmentName:Course Name:College: Tutor:Date:
GDP as a Measure of Economic Well-Being_1
Economic Assignment 2Economic AssignmentQuestion 1GDP as A Measure of Economic Well-BeingGross domestic product (GDP) is viewed as a quality estimate of the whole economy at aparticular period of time. It measures the eventual output of an economy by adding investment,total consumption, net exports and government expenditure. By dividing the GDP of a countrywith the total population of the country we obtain per capita income which is essentially used togauge the standards of living of the populace. Income is however not the only determinant ofwell-being as postulated by many scholars and economists leading to the proposal of othermetrics to determine the standards of living. GDP on its own is therefore not conclusive indetermining the standards of living of the populace.The quality of life is a wide concept that that entails a variety of entities. It includeshealth, work status, living conditions and the subjective perception an individual has of suchfactors. The gross domestic product has been used for a long time as a measure of the economicactivity of a region or country and many policy makers use it as a benchmark on which to basetheir decisions. Due to this purpose the GDP has been widely used to qualify the well-being ofindividuals. GDP is however not sufficient a parameter and has to be supplemented by thefollowing indicators. Individuals’ material living standards are better monitored by usingmeasures of household income and consumption. In the report they argue that the income of thecountry’s citizens is a more efficient method in measuring their well-being than the domesticproduction.
GDP as a Measure of Economic Well-Being_2
Economic Assignment 3Some parameters affect the well-being of life positively while others affect the quality ofwell-being negatively. A secure environment impacts a citizen’s well-being positively. This isbecause the citizen will be more productive in a secure environment than in an insecuresurrounding thus increasing the well-being of the citizen. This should be factored in determiningthe well-being of individuals in alternative methods that include other happiness parameters likeleisure and level of education and health alongside the GDP.Question 2Business cycle and its impact of a stock market crash on the business cycleThe business cycle is a systematic, irregular upward and downward movement ineconomic activity measured by changes in various macroeconomic variables and the grossdomestic product (GDP). A business cycle is always defined by four bust and boom phases.These include recession, recovery, growth and decline. These phases repeat themselves overtime. The stock market crash is an unexpected instantaneous drop in stock prices eventuallybringing about a major loss of paper wealth. A stock market crash could have adverse effects onthe business cycle thus making the business cycle phases unpredictable and irregular.The business cycle is primarily associated with significant business trends while someanalysts use the business cycle to study and understand changes in business. The business cycleis the most common indicator that investors consider when assessing whether to enter or exit themarket and at what particular event of the cycle. Stock market crashes are thought to be causedby a continued period of increasing stock prices and extra economic positivism With more money in the stock market the stock prices tend to rise significantly. Thebusiness cycle plays a role in determining when an investor or a new player enters the market
GDP as a Measure of Economic Well-Being_3

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Introduction to Macroeconomic Principles and Understanding of GDP
|6
|1278
|219

Economics Study Material
|15
|2391
|91

Economics for Managers : Essay
|12
|2434
|55

Economic Assignment- Gross Domestic Product (GDP)
|7
|1494
|144

ASSIGNMENT ON ECONOMICS FOR DECISION MAKING.
|9
|1375
|13

Business Economics
|17
|2420
|73