GDP - a good measure of social Well-being
Topics: Quality of life, Gross domestic product, Human Development Index / Pages: 6 (1315 words) / Published: Dec 12th, 2013

In order to examine economic growth or analyze the wealth of a country, it is necessary to have a way to measure the size of an economy such as Gross Domestic Product (GDP). Economists usually measure the size of an economy by the amount of stuff it produces. This makes sense in a lot of ways, mainly because an economy's output in a given period of time is equal to the economy's income, and the economy's level of income is one of the main determinants of its standard of living and societal welfare. GDP is the most closely watched economic statistic because is it thought to be the best single measure of a social well-being. The definition of GDP is composed of four parts. Firstly, we have to take into consideration the market value of the products. Froyen (2009) states that in order to gain the market value of the product we have to times the number of products produced the market by the prices they are traded at. For example, each unit of product A is 5$ and product B is 2$ so the market value of 20 product A and 40 product B is 5$x20+2$x40=180$
Secondly, GDP is calculated using the values of the final goods and services and therefore does not take intermediate goods into account. A final good or service is the product brought by the user at its end stage whereas an intermediate good could have gone into the production of a final good. For instance, bread is a final product that it brought by the consumer but flour could have been brought by the producers of the bread in order to make the bread.
Another factors that makes up GDP is that the product has to be made within the confidences of country which is basically summed up by the ‘D’ in GDP. For example, if a Viet Nam retailer manufacturers his products in Viet Nam then it becomes part of VN GDP but if it is produced and sourced from China then it does not.
Finally, GDP as measured in a given time period as mentioned earlier which is usually annually or quarterly. GDP can be measured in two ways the

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