Question

discuss the shortcomings of using gdp as a measure of the economys output performance and as a measure of its standard of living.

Explanation:

GDP fails to account for non - market transactions (e.g., volunteer work, household chores). It also ignores the quality of goods and services. For example, more pollution - causing industrial output might increase GDP but harm living standards. Additionally, GDP does not measure income distribution. A country with high GDP could have extreme income inequality, so average living standards might be misleading. It also does not capture leisure time, which is an important aspect of living standards.

Answer:

GDP has several shortcomings. It misses non - market activities, ignores quality and income distribution, and does not account for leisure.