Final answer:
The statement is true. GDP is not a good measure of wellbeing as it only considers economic activity and neglects other factors such as health, education, and environmental quality. It also fails to capture non-market activities and changes in income inequality.
Step-by-step explanation:
GDP (Gross Domestic Product) is not a good measure of wellbeing for several reasons. First, GDP only measures economic activity and does not take into account other important factors that contribute to wellbeing, such as leisure time, environmental quality, health, and education levels. For example, two countries may have the same GDP, but one country may have better healthcare and education systems, leading to a higher standard of living for its citizens.
Second, GDP does not capture non-market activities, such as unpaid work and household production, which are essential for wellbeing but not included in GDP calculations. Additionally, GDP does not consider changes in income inequality, technological advancements, or the subjective value society places on certain outputs.
Therefore, it is true that GDP is not a comprehensive measure of wellbeing, as it overlooks important aspects of a country's standard of living.