Question

GDP is often used as a measure of well-being. Is it a reasonable measure of well-being? If so, why does Norway with its high standard of living have a relatively low GDP? Why do India and China, with their relatively low standards of living have some of the highest GDP in the world?

must be at least 250 word count

Answer 1

Gross domestic product Gross domestic product is the market price of all final goods and services produced with in the domestic territory of country by the resident and nonresident during an accounting year. GDP= Price * Quantity.

Real GDP is a true measure that keeps check on change in living standard and productivity as it adjusts for inflation.

It is considered that Norway have high standard of living as compared to India and China but the GDP of India and China is greater than the Norway. The reason for these is variation in population . In Norway population is less . Norway population is near about 5 million. Therefore , overall GDP in Norway is less but GDP per capita is high due to high standard of living. But the population of India is 1.3 billion Therefore GDP per capita is low.

GDP per capita is indicated by = GDP/ Population