Should GDP be adjusted or supplemented to consider measures for other things, such as products that are not exchanged in a market, pollution, leisure time, or health? If so, how would we adjust or supplement GDP to do this?

Question

Abbie Sullivan

Business

17 November, 15:21

Should GDP be adjusted or supplemented to consider measures for other things, such as products that are not exchanged in a market, pollution, leisure time, or health? If so, how would we adjust or supplement GDP to do this?

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Answers (1)

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Vance Mendoza · Answer 1

Yes, it is possible to readjust the GDP.

Explanation:

It is possible to readjust the GDP to consider some variables in a certain period of time, for which it should be known that the

GDP is the value of the total production of goods and services of an economy in a given period of time, usually a quarter or a year. When interpreting the data referring to GDP, the differences between real and nominal GDP must be taken into account.

Nominal GDP is the monetary value of all goods and services produced by a country or economy at current prices of the year in which said goods and services are produced. However, in inflationary periods, an increase in prices can give the false impression of an increase in GDP, and therefore a false sense of Economic Growth without real production having increased.

To adjust GDP according to the effects of inflation, real GDP is used, defined as the monetary value of all goods and services produced by an economy at constant prices.