Suppose the government passes a law eliminating holidays and, as a result the production of goods and services increases because people work more days per year (and thus enjoy less leisure per year) based on this scenario which of the following statements is

a. gdp could either increase or decrease because gdp includes leisure
b. gdp would definitely increase despite the fact that gdp includes lelsure

The correct answer is GDP would definitely increase because GDP excludes leisure.

Explanation:

The GDP does not measure the level of development of a country, nor does it measure the quality or level of its educational system or its health. Come on, that the quality of life in general is not measurable by GDP, although it is true that countries with a higher GDP per capita can afford better health or education services, as well as better infrastructure and services in general.

It does not measure the state of the environment or the damage caused to it or natural resources by the economic activity carried out. In other words, GDP does not report externalities, that is, it does not reflect the total social benefits and costs derived from economic activity.

GDP does not measure the quality of the goods and services produced. The GDP figures are only numbers that do not take into account exactly what is being produced or what is the quality of what is produced. This prevents, for example, comparing production between different eras. Does a computer add up to GDP now than in the 80s? The answer is no. Does a country of services add up to an oil exporter? The answer is also no.

It ignores the value of elements that contribute to maintaining the level of well-being of the population, such as leisure or freedom. In freer countries or in which its inhabitants have more leisure time and better options in which to invest it, well-being is much greater.

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