Since Country A has a higher GDP than Country B then this must mean the residents of Country A are better off in terms of economic welfare

Running Head : GDP AND ECONOMIC WELFARE

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Since country A has a higher GDP than country B then this must mean the residence of a country A are better off in terms of economic welfare Discuss

Gross Domestic Product (GDP ) is the most important economic indicator and it is used for comparison purposes to see how countries are doing economic wise . It entails the aggregate production or output in a country . GDP can be measured using either the expenditure approach where all final

expenditures are added or by the income approach where all compensations of employees and other forms of incomes are added up . GDP is used to measure an economy 's economic growth . Hartzenberg T et al (2005 , 114 . The real GDP can be used to establish how an economy is performing and hence compare various economies as one can compare their outputs . It is also important in the sense that it can be used for forecasting purposes and hence important in planning . This will distinguish the difference between economic growth which can be measured using GDP statistics and national welfare or people 's well being

According to McConnel and Brue in their distinguished book `Economics a country can be said to have economic growth when there is a positive increase in its GDP . Economic growth is different from economic welfare and economic development . Economic growth is characterized by an increment in natural resources , the quantity or quality for the human resources , as well...