Question

Real GDP per capita is not a perfect measure of the well-being of a country's individual citizens because: Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. it does not account for inflation. checked it does not measure quality-of-life factors such as crime, pollution, and literacy. checked it tends to favor countries with a larger population over those with a smaller population. unanswered it does not account for distribution of wealth. checked it fails to measure activities such as home production, which can have a significant impact on individual well-being. checked higher GDP correlates to a better healthcare system.

Answer 1

Answer:

it does not measure quality-of-life factors ; it does not account for distribution of wealth ; it fails to measure non monetary (home production) activities

Explanation:

Real GDP is the total value of goods & services produced in an economy, during a period of time. But it is not correct measure of welfare level.

• It does not measure non monetary production, like hobby production eg kitchen gardening, self made paintings, music. But, they increase welfare
• It does not take into consideration the qualitative factors affecting welfare like pollution, crime & literacy. Externalities cause extra benefit or harm to welfare level, but are excluded from GDP.
• Inequitable distribution of  per capita (average) GDP increases rich poor standard of living divide. So, the distribution effect ignored make GDP an inapt measure of average welfare level.

Real GDP adjusts the value of goods & services for price change (Inflation), it is a correct measure of increase in real flow of goods & services. GDP & health positive correlation is a favouring point for GDP as a measure of welfare. So, these options are incorrect.