Net Social Welfare Measurement of growth that considers

Net Social Welfare • Measurement of growth that considers the economic factors and non economic factors of a country. • Key indicators are considered to rank countries against each other through the Human Development Index. • This measurement considers the overall social wellbeing in the country including standard of living.

Economic factors ( usually to do with money) • Examples include • Gross Domestic Product per year • Gross Domestic Product per capita (per person) e. g. $24996 person is an average • Employment levels and unemployment • Inflation levels • Government debt • Spending and savings records including trade with other countries e. g. Balance of Payments

Non Economics Factors (social factors) • • Examples includes Life expectancy – 80 years Literacy rate – ability to read /write Education levels Pollution levels Crime statistics Resource depletion levels Infant mortality rate e. g. death before 5

Economic Growth methods Advantages and Disadvantages • Net Social Welfare Advantages Disadvantages Includes social aspects of living in a country. Difficult to measure as methods can be different between countries Comparisons can be exaggerated due to different measurement statistics. Covers social improvement and decline so standards of living are considered

Economic Growth methods Advantages and Disadvantages • REAL GDP – Advantages Disadvantages Increase in GDP shows actual production increases not just potential production possibilities. Easier to measure than PPC or NSW as can calculated based on company records nationally. Statistics can be limited by measurement methods. E. g. people lie on surveys so GDP can be over estimated. Non market activities excluded including DIY , unpaid work, cash jobs and the black market. So becomes underestimated Easiest measure to make comparisons between countries based on the per capita calculation Includes negative production as well as positive i. e. cleaning up pollution caused by other production

Economic Growth methods Advantages and Disadvantages • Productive Capacity Advantages Disadvantages Shows full potential of an economy based on use of all resources and technology available to production. Does not show actual production at the current point in time Shows ability to increase production through investment for the future by using research and development to locate new resources / improve technology available. Production could be inefficient and resources not used to best potential i. e. large levels of unemployment in the economy due to recession

Which measure of Growth is the best? • Each measure looks at a different aspect of growth so it depends on what you are interested in e. g. social standards, production quantities or potential future improvement. • The answer can be Real GDP or Productive capacity but must be argued well discussing the advantages and disadvantages of each method. • Real GDP is the best measure as it shows actual production rather than potential production.