Economic Geography What is GDP, and why is it important? When we’re talking economics, what are we talking about? WWWWhat people do for a living; how they get what they need in order to survive. What is GDP, and what does it mean? What do we use it for?

GGDDPPGGDDPP Gross Domestic Product Total amount (or value) Home, as in country or homeland; within a set of boundaries Something that is produced by labor (can be goods or services)

So…  Gross Domestic Product refers to the 1) Total Value of 2) all the goods and services produced 3) within a country’s borders. (rewrite this statement in your own words)  Looking at a country’s GDP helps us figure out how rich or poor a country is.

HOW does it work? Let’s compare some numbers….

 Which country appears richest, based on its 2010 GDP? Why?  $ 5,745,000,000,000 (t)China  $ 5,391,000,000,000 (t)Japan  $ 3,306,000,000,000 (t)Germany  $ 2,259,000,000,000 (t)U.K.  $ 117,300,000,000 (b)Kuwait

From the looks of things... Most people would say that China appears to be the richest country BUT What characteristic of China makes it different from the rest of these countries? MORE PEOPLE

When we take the country's GDP and divide by the number of people living there, things change a bit. This is called per capita GDP (per capita = per person)

Notice how our countries line up now CountryGDPPer Capita GDP Kuwait$117 billion$51,700 Germany$3.3 trillion$35,900 UK$2.26 trillion$35,100 Japan$5.4 trillion$34,200 China$5.75 trillion$ 7,400

So GDP can be looked at two ways Total GDP – the total amount of money made in the country from the sale of all final goods and services Or Per Capita GDP – the Total GDP divided by the number of people in the country Per Capita GDP gives us a better picture of how the people in the country are doing

This is how it looks when you add the USA to the list: CountryGDPPer Capita GDP Kuwait$117 billion$51,700 Germany$3.3 trillion$35,900 UK$2.26 trillion$35,100 Japan$5.4 trillion$34,200 China$5.75 trillion$ 7,400 USA $14.62 trillion$47,400

GDP can range from very high to very low, depending on the country Look at the difference between these two countries: CountryGDPPer Capita GDP USA$14.6 trillion$47,400 Zambia$997 million$ 500

Where your country's GDP falls gets your country classified as either Developed or Developing The USA is classified as a developed country; Zambia is classified as a developing country. Make a list of conditions that you think you might find in developed countries that you wouldn’t find in developing countries.