Identify a limitation of using gross domestic product (GDP) as a measure for development.(1 point)
Responses
It overemphasizes health indictors such as life expectancy.
It overemphasizes health indictors such as life expectancy.
It doesn’t account for income distribution.
It doesn’t account for income distribution.
It overemphasizes environmental sustainability.
It overemphasizes environmental sustainability.
It doesn’t account for the value of services in the economy.
It doesn’t account for the value of services in the economy.
To interpret the Human Development Index (HDI) of North America, Central America, and the Caribbean accurately, what factor must be considered?(1 point)
Responses
The low HDI of Mexico makes the average score much lower.
The low HDI of Mexico makes the average score much lower.
The HDI of Haiti accurately represents all the other countries.
The HDI of Haiti accurately represents all the other countries.
HDI does not account for the large land areas of Canada and the U.S.
HDI does not account for the large land areas of Canada and the U.S.
Canada and the U.S. have significantly higher scores than the rest of the countries.
HDI does not account for the large land areas of Canada and the U.S.
How can being located near high Human Development Index (HDI) countries negatively affect low HDI countries?(1 point)
Responses
Lower-scoring countries are dominated by higher-scoring ones because they have more land.
Lower-scoring countries are dominated by higher-scoring ones because they have more land.
This proximity can lead to brain drain, as the most talented people move to the higher HDI countries.
This proximity can lead to brain drain, as the most talented people move to the higher HDI countries.
This causes the high-scoring countries to conquer lower-scoring ones.
This causes the high-scoring countries to conquer lower-scoring ones.
The most talented people in low-scoring countries are banned from accessing the resources of high-scoring countries.
This proximity can lead to brain drain, as the most talented people move to the higher HDI countries.
It doesn’t account for the value of services in the economy.
To identify a limitation of using gross domestic product (GDP) as a measure for development, you can critically assess its various components and consider alternative metrics for a comprehensive understanding. Here are four possible limitations:
1. Overemphasis on health indicators: GDP places excessive emphasis on health indicators such as life expectancy. While life expectancy is important, it does not provide a complete picture of development, as other factors like education, gender equality, and access to healthcare may also be significant.
To find this limitation, you can examine the components of GDP and consider the broader scope of development beyond health indicators. You may also explore alternative indices like the Human Development Index (HDI) or the Inequality-adjusted Human Development Index (IHDI) that incorporate a more holistic range of factors.
2. Lack of consideration for income distribution: GDP does not account for income distribution within a country. It measures the total economic output without distinguishing how the wealth is distributed among the population. This limitation can be identified by examining the calculation of GDP and recognizing that it does not capture disparities in income and wealth.
To understand this limitation, you can explore alternative measures of development that focus on income inequality, such as the Gini coefficient or the Palma ratio. Additionally, looking at data on poverty rates and the concentration of wealth can provide insights into income distribution that GDP fails to reflect.
3. Overemphasis on environmental sustainability: GDP tends to overemphasize economic growth without accounting for the negative impact on the environment. This limitation can be identified by studying the environmental costs associated with economic activities that fail to be considered in GDP calculations.
To recognize this limitation, you can explore alternative measures of development that explicitly incorporate environmental factors, such as the Genuine Progress Indicator (GPI) or the Ecological Footprint. These indices provide a more comprehensive understanding of development by considering environmental sustainability alongside economic growth.
4. Failure to account for the value of services in the economy: GDP primarily focuses on goods production and may undervalue the contribution of the service sector. This limitation can be identified by considering the changing composition of economies where services play an increasingly vital role.
To address this limitation, you can examine alternative metrics like the Index of Economic Well-Being (IEWB) or the Index of Sustainable Economic Welfare (ISEW) that include a broader range of economic activities, including services. Understanding the importance of the service sector in modern economies helps identify this limitation of GDP as a measure for development.