Chapter 10 Reflection

1.  What is the difference between an intermediate good and a final good?  Why do we care?

The difference between an intermediate good and a final good is an intermediate good is part of the process that becomes the final good. In economics, we care because the GDP includes only the value of the final goods. By counting the value of the intermediate good and the final good would be double counting.

2.  Is GDP a good measure of well-being?  Why or why not?  What is missing?  Has what is missing changed over the years? (For example, if improvements in products are not counted, is that more important now than it was a few decades ago?)

No, the GDP is not a good measure of well-being. Yes, the GPD is considered the single best measure of the economic well-being, however, the GDP measures both the economy’s total income and the economy’s total spending on goods and services. The result is data regarding a person’s income and spending of the average person. This does not account for the wellbeing of family, quality of education, or strength of our relationships. The GDP cannot measure our happiness outside of income and spending. On the opposite side of the spectrum, the higher the GDP allows for better healthcare, etc. What is missing is the ability to account for the well-being. What is missing has not changed over the years besides establishing other ways to attempt to take into account the quality of life. I believe that there is so much more to life than my income and spending.

3. What do you think of other measures such as Gross National Happiness pr Gross Progress Indicator?

I think both the GNH and GPI are great ways to try to take into account the economic well-being of its people. I think we should support this style of research because economic well-being cannot only be judged on income and spending.