Question

If 1% of the population has 70% of the wealth, while the other 99% of the population has the remaining 30% of the wealth, GDP ____________________. Select the correct answer below: would be able to show that disparity would not be able to show that disparity

Answer 1

• Would not be able to show that disparity

Step-by-step explanation:

Why the GDP would not be able to show that disparity?

Because GDP is an aggregate indicator of a country's economy, which accounts for the total amount of goods and services produced by that economy, and does not consider how it is formed from different population groups.

One way to calculate the GCP is using the expenditures of the different consumers of the economy:

GDP = Private consumption + Goverment consumption + Investement from privates + Exports - Imports

As you see those are aggregate consumtptions, thus the GDP is not able to show that there is a dispparity in the wealth inside a nation.