A recent World Bank study found that in South Africa, the top 1% of the population have about 71% of the wealth in the economy, and the lowest 60% of the population have about 7% of the wealth in the economy. What shortcoming of GDP measurement does this finding reflect?

Question

Quizplus · Accepted Answer

This finding reflects the shortcoming of GDP measurement that it ignores income distribution. While GDP measures the total economic output of a country, it does not take into account how that output is distributed among the population. The concentration of wealth among the top 1% in South Africa highlights the significant income inequality in the country that cannot be captured by GDP alone.

A Recent World Bank Study Found That in South Africa