Answer: GDP is used to measure a society’s standard of living, but it is not a thorough indicator since it does not directly account for leisure, standard of environment , levels of health ,education and security ,inequality etc. i.e. The values that society may place on certain types of output.
The short coming with GDP is that it does not ponder upon the true economic welfare in the society. To analyze it's limitations better, we will ponder upon several factors that are not accounted for in GDP and are listed above.
GDP does not account for leisure time. GDP includes what governments and other agencies spend on healthcare, education and security but it does not include actual levels of health and learning.
GDP has nothing to list about inequality in society. For example, when GDP per capita increase by 17%, it could directly or indirectly mean that GDP for everyone in the society rose by 17% or it could eventually state that GDP of some class rose more while the GDP of others class has declined.
In such cases we could always ponder upon several other useful and relative key terms such as Human Development Index (HDI) while also analyzing GDP.
