Economics for managers Essay Example | Topics and Well Written Essays - 1500 words

Economics for managers - Essay Example246). This is the causation wherefore the raceal governments of most of the dry lands attempt to enhance the GDP level of their respective economies. Some of the reasons why GDP of any rural atomic number 18a could not be used to evaluate the exemplar of living overabundant in a nation and hence, its well-being, have been depicted underneath. Firstly, GDP takes no news report of the distribution of riches or income among the residents of a given nation and thus, does not portray a true account of the standard of living among various strata of the society. One appropriate example of a lack of discreteness of GDP, in amount the well being of any nation could be derived from the terrorist attacks in USA in 2001. The attacks left the nation distraught and its citizens at a worse- run into state. Many people lost their lives and among those who lived, many lost their jobs. Yet, the GDP of the nation was hiked primarily due to the fact that t he statistic included the sums injected in the economy in the form of aids and ancestry reliefs (Baumol & Blinder, 2009, p. 474). Furthermore, the instance with that of the developing nations or rather the ones passing through the transition phase often recruit very high GDP values which does not go with the actual living standards prevailing in these nations. China and India ar regarded to be the fastest developing nations in the world. These nations record one of the fastest frugal ontogenesis rates even though the degree of well being in both(prenominal) of them argon quite low with only a handful of the population base experiencing a betterment in their living standards. The primary reason behind this is the huge population bases in both the nations, which respectively are regarded as the ones endowed with the largest and second-largest populations in the world. A lions share of the population bases in both these nations live in utter poverty with dwindling resources. Thou gh both these nations are associated with an economic growth rate of about 8 percent and more, the Gini coefficient in these nations are evident of the deteriorating living standards. While it is 33 for India that for China as measured in the year 2006 was, 44.7 (Gehring & Kulkarni, 2006, p. 12). Hence, though China is slightly better off than India, none could be regarded in a highly good social condition. But income inequality and preponderance of poverty in a nation are not the only factors which indicate towards a nations standard of living. There are certain other aspects such as environmental concerns which are equally essential in evaluating the same. Secondly, GDP does not deduct the used up values from its account which is why it gives a wrong impression about the true economic picture in a nation. It includes the values depreciated through usage of capital, natural resources depleted on account of deforestation or extravagant deployment, reduction in mineral and fuel reso urce endowments, as well as loss of stuffing of land. Thirdly, the extent of environmental pollution and degradation in a nation often hampers a mix of production processes in an economy which is why it is often counted as a drawback