Literacy Rate and GDP

Most developed countries have high literacy rates Literacy rates looks at the percentage of people over 15 in a country who can read and write. Most developed countries have high literacy rates

Cycle of Poverty Having basic reading and writing skills is very important. Without skills, workers are stuck in the lowest paying jobs Illiterate people take these low paying jobs and cannot afford their children’s education…cycle continues for generation Standard of living remains low because education level is low Developing counties more likely to have a greater illiterate population

GDP= Gross Domestic Product The total market value of all final goods and services produced within the country in a year Per Capita means how much money each individual would receive IF a country divided its yearly income equally among everyone GDP Per Capita is a measure of wealth with the wealth of other nations Raising GDP increases standard of living

What affect does Literacy rates have on GDP? Does Literacy rate of a country seem to have an impact on - GDP per capita? - Life expectancy? WHY????

What other factors may affect GDP per capita?

What other factors may affect GDP per capita? Political Issues Government corruption Government Type Uneducated population Natural resources Natural disasters Famine Wars What other factors may affect GDP per capita?

So, how does literacy rate affect the standard of living in countries? Normally, the higher the literacy rate the higher the GDP per capita.

Four factors of Economic Growth Natural Resources Human capital Capital Entrepreneurship

Natural Resources “Gifts of nature” Important to countries- without them, countries must import resources they need (costly) Countries with a lot of natural resources are able o use them to produce goods and services or trade with other countries to make money for the economy Renewable sources: generated from natural sources, clean. Ex: sun, wind, hydroelectric power Nonrenewable sources: generated from the earth, causes damage to environment to retrieve/when used. Ex: oil, coal, Earths minerals

Human Capital The health, strength, education, training, and skills that people bring to their jobs. Countries invest in human capital when they: Invest in education Invest in training workers in different skills Invest in healthcare

Human Capital What do you think would be an example of human capital? How can a country invest in human capital? Do you think a country would be wise to invest in human capital? Why or why not? What is the relationship between Human capital and GDP? Do you think our chart supports this?

Capital Goods Capital goods- all of the factories, machines, technologies, buildings, equipment needed by businesses in order to operate The more capital goods a country has = the more goods and services they are able to produce= the more money they make. Ex:

Entrepreneurship People who start businesses These people risk their own money and time because they believe that their business ideas will make a profit They create jobs and bring together natural resources, human capital and capital goods together to make different types of goods and services The more entrepreneurs a country has, the higher the country’s GDP will be