Question

Many economists argue that our current measure of GDP is inadequate. Are there better measures and what are the implications for business?

Answer 1

It has to be noted that there are many problems in measuring the GDP such as the income from previous years production which are sold this year are not taken into account, the income loss for free goods and services is not taken into account, the income earned through illegal activities is not considered. We also export intermediate goods which are not taken into account etc. Therefore the current measure of GDP is inadequate and the better measure is to include all these factors in measuring on the whole. This can give a clear picture of how the businesses are running in the country on the whole.