Salma Ahmed
English Lit. GCSE Student
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What are the limitations of GDP as an indicator of comparative living standards between countries over time?
- Words:
- 484
- Submitted:
- Thu Jul 11 2002
Have a little read: ... What are the limitations of GDP as an indicator of comparative living standards between countries over time? Gross Domestic Product (GDP) shows the total value of goods and services provided within a country and is compared with other countries to try an estimate a comparative standard of living. However there are many problems comparing national income between countries; ? Income figures for each country are likely to be in different currencies and so will need to be converted into a common currency, deciding on an exchange rate can be difficult as the rate changes frequently. ? Different countries have different accounting techniques so total income may be calculated differently. ? A country may have a lower income than another but they may also have lower prices (for example consumer goods), in this situation the price level will need to be taken into account. ? Weather and climate also play a big factor, some countries in a warm climate won't
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