Adjusting Economic Output for Natural Resource Depletion
To ensure that measures of economic output can accurately inform us about a nation's wellbeing, it is essential to account for the depletion of natural resources. This principle requires subtracting the value of consumed natural assets from the total output figure. The reasoning for this adjustment is analogous to the standard economic practice of accounting for the depreciation of man-made capital, such as the wear and tear on machinery and equipment, which is also used up in the production process. By including the depletion of both natural and physical capital, the resulting metric provides a more realistic assessment of sustainable economic performance.
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.1 Prosperity, inequality, and planetary limits - The Economy 2.0 Microeconomics @ CORE Econ
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