explain why you either agree or disagree with the biggest weakness of GDP that they identified. The income approach and

[answerhappygod]

explain why you either agree or disagree with the
biggest weakness of GDP that they identified.
The income approach and expenditures approach are two ways to
measure Gross Domestic Product (GDP). The income approach is used
to “determine the GDP by summing all incomes received for providing
resources” (McConnel et all., 2021). The expenditures approach is
used to “determine the GDP by summing all expenditures on final
goods and services” (McConnel et all., 2021). The expenditures
approach is more specifically the sum of expenditures on final
goods and services from consumption, government spending,
investments, and net exports. The income approach focusses on
income received while the expenditures approach focusses on the
income spent. It is important to understand examples of each
component of GDP to understand how it is affected. An example of
consumption would be buying a microwave to heat up food since the
good is used for the household. An example of an investment would
be an office buying a new printer since it is a business purchase.
An example of government spending would be the US government
purchasing firearms for its military since it is government
expenditure on production of a good. Net exports is the exports
minus the imports. The US exports crude oil and imports Ferraris.
The net of all exports and imports would be factored into the GDP.
Income from the selling of illegal drugs on the streets is not
counted in the real GDP. Drugs such as methamphetamine and ecstasy
are sold on the black market with cash transactions that cannot be
tracked. GDP does not account for these goods since there was no
official market transaction. Dealers make sure transactions stay on
the black market to avoid being caught and arrested. I think that
the biggest weakness of Real GDP is its inclusion of negative
things such as natural disasters. This is because it gives the
illusion that country is doing well with increasing GDP in a year
of disaster, but that is because a lot of money is spent towards
disaster cleanup and restoral. A lot of these expenses fall under
the government spending aspect of GDP. I think the inclusion of
negative things in GDP is misleading in representing how well a
country is doing.