Question

Discuss any two disadvantages of Gross Domestic Product.

Answer 1

1. Exclusion of Non-Market Welfare: GDP ignores crucial unpaid contributions like household labour, volunteer work, and childcare. It also fails to account for structural factors like wealth inequality and the general distribution of income.
2. Disregard for Environmental Degradation: The metric counts the depletion of natural resources and environmental destruction as positive economic output. It then adds the monetary cost of cleaning up disasters as further growth, ignoring long-term ecological damage.