Many Financial Analysts Use GDP as a Measure of the Economy's

question 37

Short Answer

Many financial analysts use GDP as a measure of the economy's performance.However,GDP has several shortcomings in terms of measuring economic well-being.State at least three such shortcomings and explain how each affects the validity of GDP as a measure of economic well-being.

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Definitions:

Utility Function

A mathematical representation that defines the satisfaction or utility a consumer derives from consuming different bundles of goods and services.

Zinnias

Brightly colored flowers, belonging to the sunflower tribe within the daisy family, known for their long-lasting blooms and variety in size and color.

Utility Function

An economic model that maps an individual's preference rankings for various bundles of goods onto a set of numerical values.

Price

The financial value anticipated, necessitated, or offered in return for a service or good.