Which statement describes GDP's limitation as a measure of development?

Which statement describes GDP's limitation as a measure of development?

• A. It measures economic output but not how wealth is distributed or non-economic well-being.
• B. It fully captures health outcomes.
• C. It tracks environmental sustainability well.
• D. It measures education quality.

Answer: (A)

GDP shows the total monetary value of goods and services produced in a country over a period, giving a quick measure of the size of the economy. But development isn’t just about how big the economy is; it’s also about how wealth is shared and about people’s actual lives—health, education, security, happiness, and environmental well-being. GDP misses all of those non-economic aspects and also ignores unpaid work and damage or depletion of the environment. So the strongest statement is that GDP measures economic output but not how wealth is distributed or non-economic well-being. The other ideas aren’t correct because GDP doesn’t directly measure health outcomes, environmental sustainability, or education quality. It can rise even if health, the environment, or education quality aren’t improving, and it doesn’t capture these factors in its calculation.

GDP shows the total monetary value of goods and services produced in a country over a period, giving a quick measure of the size of the economy. But development isn’t just about how big the economy is; it’s also about how wealth is shared and about people’s actual lives—health, education, security, happiness, and environmental well-being. GDP misses all of those non-economic aspects and also ignores unpaid work and damage or depletion of the environment. So the strongest statement is that GDP measures economic output but not how wealth is distributed or non-economic well-being.

The other ideas aren’t correct because GDP doesn’t directly measure health outcomes, environmental sustainability, or education quality. It can rise even if health, the environment, or education quality aren’t improving, and it doesn’t capture these factors in its calculation.