Why do we use Gross Domestic Product instead of Net domestic Product?
-
Whenever measuring the strength and growth of a countries economy we only look at the yearly gross domestic product, why don't we do so at the net domestic product? Isn't it more logical to take into account the loss/consumption of the country as well as the overall production?
-
Answer:
GDP attempts to measure what has been produced (the key word here is "production") ... therefore the investment component is the increase in the level of capital stock. NetGDP looks at the net increase. If the intent is to capture what has been produced, NetGDP would under state the amount of Goods and Services that have been produced - and likewise understate the income generated from that production. That said, many applications of GDP would actually use NetGDP - i.e. growth theory, because it needs to take account for the rate of depreciation.
Chinmay P at Yahoo! Answers Visit the source
Other answers
Well first of all, GDP does measure consumption, but that isn't important here. Many developmental economists would agree with you that GDP is not a good total measure of economic well-being. Especially if sustainable development is the goal. Things like environmental loss/gain are things they think should be measured. The problem with measuring things like that are that it is difficult to quantify the loss/gain of one extra tree.
Trey
Because it is not so shiny number as GDP and GDP looks better. There is no other logical answer to you question than this.
Crazy Man
Related Q & A:
- Why do we use quicksort instead of heapsort?Best solution by Yahoo! Answers
- How do I use my own picture instead of an avatar like on the old messenger?Best solution by Yahoo! Answers
- How can I use my own picture instead of the avatar??Best solution by Yahoo! Answers
- Why is the use of product placement important?Best solution by mpiweb.org
- Why would you use symmetric encryption instead of asymmetric one?Best solution by Quora
Just Added Q & A:
- How many active mobile subscribers are there in China?Best solution by Quora
- How to find the right vacation?Best solution by bookit.com
- How To Make Your Own Primer?Best solution by thekrazycouponlady.com
- How do you get the domain & range?Best solution by ChaCha
- How do you open pop up blockers?Best solution by Yahoo! Answers
For every problem there is a solution! Proved by Solucija.
-
Got an issue and looking for advice?
-
Ask Solucija to search every corner of the Web for help.
-
Get workable solutions and helpful tips in a moment.
Just ask Solucija about an issue you face and immediately get a list of ready solutions, answers and tips from other Internet users. We always provide the most suitable and complete answer to your question at the top, along with a few good alternatives below.