Explain 'non-monetary exchanges' as a limitation of using gross domestic product as an index ofwelfare of a country.

Non-monetary exchanges refer to transactions or activities that do not involve the use of money as a medium of exchange. These exchanges can include bartering, sharing resources, or providing services without a monetary value attached to them.

As a limitation of using gross domestic product (GDP) as an index of welfare, non-monetary exchanges are not accounted for in the calculation of GDP. GDP is primarily based on the value of goods and services produced within a country's borders, which are typically measured in monetary terms.

However, non-monetary exchanges can contribute significantly to the well-being and welfare of individuals and communities. For example, a person who receives help from a neighbor in fixing their car or a community that shares resources to meet their needs may experience an improvement in their overall welfare, even though these exchanges are not captured in GDP.

By focusing solely on monetary transactions, GDP may not accurately reflect the true level of welfare or quality of life in a country. It fails to capture the value of non-monetary exchanges, which can be important for social cohesion, community support, and overall well-being.

Therefore, when using GDP as an index of welfare, it is important to consider the limitations posed by non-monetary exchanges and explore additional measures or indicators that can provide a more comprehensive understanding of a country's welfare.