Economics Assignment: GPI, Tax Cut and Tariff Imposition

Running head: ECONOMICS ASSIGNMENT
Economics assignment
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2ECONOMICS ASSIGNMENT
Table of Contents
Answer 1:...................................................................................................................................3
Answer 2:...................................................................................................................................4
Answer 3:...................................................................................................................................5
Reference:..................................................................................................................................7

3ECONOMICS ASSIGNMENT
Answer 1:
Genuine Progress Indicator (GPI) is one of the metric utilised in order to measure the
economic growth of an economy. It was developed as the alternative measurement of the
Gross Domestic Product (GDP) measurement of the economic development. In order to
overcome the deficiencies of the GDP measurement, GPI was introduced during 1950, which
aids the policy makers to determine the growth path of the economy (Worstall 2014). While
broadening the conventional framework of accounting it includes the economic contributors
of the community and family in order to trace the development path of a said economy. GPI
is calculated depending upon more than 20 factors that aids the respective government and
policy makers to determine the genuine progress of the economy. As the factors of
calculating GPI it utilise environmental as well as social factors, which was overlooked by
the earlier methods of national development matrices. As the proper calculation regarding the
growth path of the economy, GPI integrates all the factors into a composite measures in order
to measure the benefits of economic activities within the domestic as well as foreign activities
of the national residents is weighted against cost that provide better outlook of development
(Kubiszewski et al. 2015). Though GPI is one of the best available measure of the economic
development of an economy, yet it has various issues regarding with the same. As an instance
it can be seen that GPI utilise non-economic variables like leisure time as well as
environment, which are subjective in nature and thus provides difficulties in calculating the
economic value of an economy (Kubiszewski and Costanza 2015). Normative nature of the
other matrices that determine the national growth path of an economy are simple in nature
and easy to calculate that provides them ability to determine the growth path with simplicity.
Another disadvantage of the GPI measurement is that it fails to judge an economy with the
business cycle which constrains its capability to predict the future trend of growth (Talberth
and Weisdorf 2017). Considering the facts mentioned above, it can be said that GPI is one of