AP Macroeconomics / Unit 2: Economic Indicators and the Business Cycle
2.2 Limitations of GDP
Notes
GDP leaves out nonmarket activity (housework), the underground economy, leisure, environmental damage and income distribution. It's not a perfect measure of well-being.
Practice
Which is NOT counted in GDP?
Nonmarket work.
GDP per capita doesn't show:
Inequality is hidden.
Pollution from a factory affects GDP by:
An externality GDP ignores.
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