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To What Extent Do National Income Statistics (Gdp) Provide a Good Basis for Comparison Between Countries?

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Economics Essay – To what extent do national income statistics (GDP) provide a good basis for comparison between countries?
In the world of Economics, GDP per capita is used to compare the way that countries are coping with different economic climates; such as recession, boom etc. This essay will be assessing whether GDP is the best statistic to use for comparing different countries’ economies. GDP is the most commonly used method by world famous economists to assess how successful an economy is. GDP stands for Gross Domestic Product and is the market value of the official goods that have been transferred in and out in a country over a certain period of time.
GDP is a good method for comparing the national incomes of countries because it can be very accurate. This is especially the case when the GDP for a division is divided between the population of a country. This is a statistic called GDP per capita and is a lot more accurate at showing how wealthy a country is because it divides the value of the goods transferred in a country between the whole population. This is clearly a better way of measuring how wealthy a country is because it explains how rich each person is in a country. This is a better way of comparison between countries because it shows how rich the country is in terms of value per person instead of making assumptions. This makes a huge difference because in normal GDP, China is the richest country in the world because it is worth the most as a country; however when GDP per capita comes into play, Luxembourg is the richest because it has the highest value per person in the world.
However there are many different problems with GDP, one of these is that it doesn’t include everything that there is that is traded per day. For instance GDP misses out sales between companies, this is a very active market because companies, especially larger ones are very…...

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