Question

Why Nominal GDP doesn't indicate social welfare?

Answer 1

Dear student,

Nominal GDP does not indicate social welfare because GDP calculation does not take into account values added by environment/ nature conservation and preservation. It does not take into account the care services given by our mothers or any other person without expecting any monetary gain. Nominal GDP also does not have a notion of social being of an individual like his happiness, satisfaction, cultural fit, moral support, etc.

Regards