Gross Domestic Product

B​‌‍‍‍‌‍‍‌‍‌‌‍‍‍‌‍‌‌‌‍​y most measures, life over the past four or five decades has gotten better only for a narrow stratum of the population. Everyone else has muddled through, anywhere from one to several paychecks or one doctor’s visit away from bankruptcy. (The inability to pay medical bills is the single greatest reason for bankruptcy in the United States). Unfortunately, we tend not to consider “most measures” of the well-being of people. We think in very narrow terms. The most commonly used measure of well-being is the gross domestic product (GDP). It is an excruciatingly narro​‌‍‍‍‌‍‍‌‍‌‌‍‍‍‌‍‌‌‌‍​w concept. Many, probably most, economists believe that the capitalist system will create the greatest amount of wealth and, in theory, this means the greatest amount of well-being. They call this the first law of welfare economics. The problem is that “law” will not come to fruition without government involvement and strong societal institutions. This has led many social scientists to advocate for broadening, beyond GDP). Discuss the need for a new measure of societal well-being. The following resources will help you to understand the concern over the GDP​‌‍‍‍‌‍‍‌‍‌‌‍‍‍‌‍‌‌‌‍​.

Sample Solution