Normative economic statements are economic policy goals. Equity goals are based
ID: 1154447 • Letter: N
Question
Normative economic statements are economic policy goals. Equity goals are based on what happens--the fairness of outcomes. Efficiency arguments are based on how it happens--maximizing the social value of output. We will do equity arguments this week.
A compelling normative argument usually contains some positive (factual) supportive statements. Consider these equity statements:
Statement One: It is acceptable to use GDP to measure output but it should not be used as a measure of well-being since this is unfair to those not sharing in the prosperity. (related to Chapter 7 reading)
Statement Two: The U.S. government should undertake policies to promote more rapid national economic growth so that everyone can share in the prosperity. (related to Chapter 8 reading)
Statement Three: The U.S. government should do more to promote economic growth in poor countries because it is unfair for us to have so much and them so little. (related to Chapter 8 reading)
For your post either:
Pick one of these statements, briefly give a fairness argument for or against that position, bolstered with some facts from the chapter.
Do not make your post exhaustive I'm looking for short but effective.
DO NOT give an efficiency argument.
Explanation / Answer
Statement one: It is acceptable to use GDP to measure output but it should not be used as a measure of well-being since it is unfair to those not sharing in the prosperity.
Arguement: I am for the arguement in statement one. This is because overall development of a nation is not measured just by overall GDP growth. There are several other macroeconomic indicators that reflect a country or an economy's advancement. A nation is not a developed one in the truest sense until the nation's economic prosperity trickles down to all the sections of its population. Only then can it be a well balanced growth. It can be compared to a situation in which the nutrition from your food intake reaches only some parts of your body and not all.
It could be said that an advanced economy displays high ratings not only on GDP measurement but also on Human development Index, Gross National Happines Index, and Social Progress Index.
GDP does not account for wealth distribution or what kind of goods are being produced. A nation may produce a high amount of goods that may not serve the nation's basic needs and still have a high GDP. A nation with high GDP may have high inequality in the distribution of resources. For example, USA, UK, Canada and Japan.
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