Limitations of GDP:
i) The exclusion of non-market transactions.
ii) The failure to account for or represent the degree of income inequality in society.
iii) The failure to indicate whether the nation’s growth rate is sustainable.
iv) The failure to account for the costs imposed on human health and the environment of negative externalities arising from the production or consumption of the nation’s output.
v) Treating the replacement of depreciated capital the same as the creation of new capital.
Limitation of GNP:
i) Exchange rate.
ii) Can't tell if the economy is growing.
iii) GNP inflated due to expatriates.
iv) GNP decreased due to foreign direct investment.
v) The Value of Leisure.
vi) Qualitative Changes in the National Output.
vii) Upgrading the Quality of Basic Data.
Limitation of CPI:
i) CPI cannot be used to measure differences in price levels or living costs between one area and another, as it measures only time-to-time changes in each area.
ii) While the CPI is a convenient way to compute the cost of living and the relative price level across time because it is based on a fixed basket of goods, it only provides a partially accurate estimate of the cost of living.
iii) The ultimate problems with the CPI that deserve mention are substitution bias, the introduction of new items, and quality changes.