Welfare

"Welfare" or "Standard of Living"

I think that I would define "welfare" or "standard of living" as the overall well-being of a person. Overall well-being of a person would include that that person has a sturdy, reliable, safe shelter, not gourmet food, but a diet that is nutritionally sound and that the person enjoys most of the time (not the same thing every day). Also I think "standard of living" should include how much leisure time a person has; I would think it safe to assume that someone cannot be happy working seventeen hours a day--barely having time to eat and sleep.

Gross Domestic Product or GDP is

"market value of the good and services produced by labor and property in the United States. GDP is made up of consumer and government purchases, private domestic investments, and net exports of good and services. . ."

The three methods of measuring aggregate output or income are GDP, GDP per capita, and National Income Accounts.

The difference between nominal GDP and Real GDP is that nominal GDP is only measuring the GDP from today. It cannot tell us anything about the past, since we cannot compare it to another year. GDP today may look like it has increased 150 percent from 1920, but in fact it could still be the same as 1920, just inflation has increased. Real GDP is the nominal GDP adjusted to account for inflation, this way we can compare the GDP from 2002 to the GDP from 1947, and have an accurate idea of the purchasing power of the dollar.

Two weaknesses of the Real GDP is that it only measures the dollar value produced in the United States--it tells nothing of the happiness of the people, or of the leisure time they have. It does not include transactions that occur in the Black Market, and does not measure other important