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The Measure of Wealth Ammu Nair Copyright 9/19/2018
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What factors influence the economy of a country?
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Natural resources, investment in human capital and capital resources, and the freedom for individuals to start their own business. (The FOUR Factors of Production.)
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How is the wealth or the economy of a country measured?
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GDP GDP stands for Gross Domestic Product. The total market value of all final goods and services produced by a country in a given year.
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Gross Domestic Product PUGG Shoes
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What does the GDP describe?
GDP tells us how rich or poor a country is. Shows if the country’s economy is getting better or worse.
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When a country invests in capital resources and human capital , the GDP of the country can only go…
UP.
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. EXAMPLE Investment is taken from the GDP. For example Russia invests 25% of its GDP on human capital and capital resources.
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When a country’s GDP is high, its citizens enjoy a better life, in other words a higher STANDARD OF LIVING.
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Standard of Living The quality of life of the people within a country. The higher a country’s GDP, the better the quality of life or standard of living. GDP Standard of Living
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GDP and Standard of Living What is the relationship?
Blue- High Green- Medium Red- Low GDP Blue- High Green- Medium Red- Low
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GDP Per Capita. GDP per capita (GDP divided by population) is often used to compare the economies of countries and the well-being of their citizens.
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GDP versus GDP PER CAPITA
The Jones Total income $80,000 The Smiths Total income $60,000 Consider each family’s income to be the GDP. If so- which family would have the highest GDP? Which family would have the highest GDP per capita? In which family would the family members get more money to spend?
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NOTE: NUMBERS ARE SUBJECT TO CHANGE
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The Ten Countries with the Lowest GDP/Capita (in hundreds)
NOTE-Numbers are subject to change.
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The Richest and the Poorest
No Data 30,000 plus 20-30,000 10-20,000 5-10,000 3-5000 1-3000
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MAP GDP /CAPITA
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