SUBJECT: MACROECONOMICS
STUDENT : LƯU MINH MẪN
LECTURER: TRANG NGO
INDIVIDUAL ASSIGNMENT 1
1. Explain why GDP is not a perfect measure of well-being?
• GDP ís not a perfect of well-being because It cannot evaluate a economy following the
objective way. However, modern economies have lost sight of the fact that the standard
metric of economic growth, gross domestic product (GDP), merely measures the size of a
nation’s economy and doesn’t reflect a nation’s welfare.
• GDP does not mention the distribution of income among social groups. An increase in
average national income can be accompanied by a sharp increase in one group and a
decrease in others. Specifically, the rich-poor divide.
2. Problems in measuring the Cost of living?
• Substitution bias
