Explain ‘non-monetary exchanges’ as a limitation of using gross domestic product as an index of welfare of a country.
Explain ‘non-monetary exchanges’ as a limitation of using gross domestic product as an index of welfare of a country.
Anurag Pathak Changed status to publish November 12, 2023
GDP does not take into account those transactions that are not expressed in monetary terms.
It is a major limitation of GDP as an index of welfare of a country.
As there are many transactions that can not be measured in money, but add to the growth and development of the nation.
For Example, non-market transactions like services of housewife, kitchen gardening, leisure time activities, etc are not included in GDP, due to non availability of data, However, such activities influence the economic welfare.
Anurag Pathak Changed status to publish November 12, 2023
