Identify a limitation of using gross domestic product (GDP) as a measure for development.(1 point) Responses It doesn’t account for income distribution. It doesn’t account for income distribution. It overemphasizes environmental sustainability. It overemphasizes environmental sustainability. It overemphasizes health indictors such as life expectancy. It overemphasizes health indictors such as life expectancy. It doesn’t account for the value of services in the economy.
It doesn't account for the value of services in the economy.
The limitation of using gross domestic product (GDP) as a measure for development is that it doesn't account for income distribution. GDP represents the total value of goods and services produced within a country's borders, but it doesn't take into consideration how that income is distributed among the population.
To identify this limitation, you can analyze the components of GDP, which usually include consumer spending, investment, government spending, and net exports. While GDP gives an overall picture of the economic activity of a country, it fails to account for how that economic growth is distributed. For example, a country with a high GDP may still experience significant income inequality, where a small portion of the population receives the majority of the income while the rest struggle.
To assess income distribution, you can look at other measures such as the Gini coefficient, which provides a measure of income inequality within a country. This coefficient ranges from 0 to 1, where 0 represents perfect equality and 1 represents maximum inequality. By considering income distribution alongside GDP, a more comprehensive understanding of development can be achieved.