The Total Value of All Final Goods and Services - Essay Example

Gross Domestic Product (GDP) measures the total value of all final goods and services that are produced within the borders of any given country (Mankiw, 2012). It is the method that is commonly used to measure the output as well as the size of an economy. Being one of the key indicators that are used to gauge the health of the economy of a country, GDP gives a bird’s-eye view of how a country’s economy is doing. For instance, if the GDP speeds up then the economy is doing well and people are getting better pay or more jobs (Barro, 2008).

Even though GDP has been used to measure the health of an economy, it has some limitations. Firstly, it fails to include harmful side effects in its calculations. For instance, economic “bads” like pollution are excluded in GDP statistics. This, therefore, implies that GDP fails to take into account the social well-being of individuals as it ignores activities that affect people’s living standards. Secondly, GDP fails to take into account leisure or human costs as well as the revenue that is generated during such times. Additionally, no consideration is given to how hard individuals work to produce output (Mankiw, 2012). The GDP measure also fails to take into account things such as love, volunteering, vibrant and supportive community, and friendships even though they contribute to the social well-being of individuals. Finally, GDP statistics do not take into account the underground economy. These are cash transactions that occur outside of recorded marketplaces, and they can be both legal and illegal. Legal ones are undertaken to avoid taxes while illegal ones include trafficking in illegal drugs (Baumol & Blinder, 2011).

Yes, economic growth and productivity can align with Saint Leo's Core Values. For instance, a country needs to put in place some policies in order to achieve high economic growth. First, the citizens need to be responsible stewards. They need to use the resources they are endowed with efficiently, effectively and economically. By putting the little resources they may be endowed with to maximum use, they will ensure that there are little or no wastage at all. Secondly, the country’s leadership should be of high integrity. This will ensure that the country excels economically and lives its goals by being consistent in economic performance. Finally, an increase in GDP indicates economic growth that in turn results in a collective growth in well-being. Leaders should strive to create a socially responsible environment that is able to challenge every citizen to be honest and work hard so as to ensure high economic growth (Baumol & Blinder, 2011). Read More