Why does real GDP have limitations in determining economic welfare?
What will be an ideal response?
First economic welfare is a broad concept of economic well-being that entails all goods and services not just those measured by GDP. These include production in the home and within the underground economy. Secondly, items such as leisure time are all aspects that are highly desirable and count for economic welfare yet are not measured by GDP. Lastly, environmental quality is highly desired yet real GDP growth could actually reduce the quality of the environment. So for all these reasons, economic growth is not totally determined by real GDP.
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Roughly what was the change in Peru's per capita GDP between 1960 and 2011?
A) 105% B) 85% C) 40% D) 20%
When using panel data and in the presence of endogenous regressors
A) the TSLS does not exist. B) you do not have to worry about the validity of instruments, since there are so many fixed effects. C) the OLS estimator is consistent. D) application of the TSLS estimator is straightforward if you use two time periods and difference the data.