The Economics of Income: The Rich Nations Mystery Why are some countries very wealthy and others so poor? In this lesson you will learn about the factors that contribute to a nation’s economic success.

How Much Do You Know? Take this Kahoot! To measure your familiarity with the basics of economic development and growth Click here Teacher should follow the above link and review the Kahoot before presenting to students.

Important Terms: The Vocabulary of Development and Growth GDP – The dollar value of all final goods and services produced within a country in one year. Not to be confused with national income, or how much all workers in a country earn. GDP per capita – GDP divided by population. This is a measure of how much the average person in a country produces, not how much they earn. It is considered a good way to measure standard of living in a country. Standard of living – this is often thought of as quality of life in a country. It includes things like measurable things like wealth, amount of material goods, and availability of services like health care and education as well as more difficult to qualify ideas like freedom, safety, and stability. Productivity – this is best described as the relationship of outputs to inputs. When discussing labor productivity, this measures how much the average worker can produce. Economic growth is closely tied to improving worker productivity. Instructor should review the above terms with students prior to lesson. All of these terms are covered in the Kahoot on the slide before so this should serve as a vocabulary review to clarify any questions from the Kahoot. www.Investopedia.com is a great reference for teachers and students who want to become more familiar with the vocabulary and concepts in this lesson.

Important Terms: The Vocabulary of Development and Growth Human capital – this term describes the economic value of a worker and his or her skills. It encompasses things like health, education, training, and experience. Generally, the higher the level of human capital, the more productive the worker is. Physical capital – this a term used to describe the machines used to produce goods such as industrial machinery, computers, transportation equipment, etc. The amount of physical capital available in a country is closely tied to its ability to grow economically. Natural resources – One of the four factors of production, natural resources are considered to be anything non-manmade in a country that aids in the production of goods and services or economic activity. This can include things like minerals, forests, or fisheries as well as things like arable land, natural ports, or potential for hydroelectric power. Instructor should review the above terms with students prior to lesson. All of these terms are covered in the Kahoot on the slide before so this should serve as a vocabulary review to clarify any questions from the Kahoot. www.Investopedia.com is a great reference for teachers and students who want to become more familiar with the vocabulary and concepts in this lesson.

Rich Nations Mystery Congratulations! It has just been announced that all the students in your school are going to be offered the chance to participate in an international exchange program to one of six countries. Your family will travel with you and all of you will have to live, work, and study in your chosen country for a period of two years. You will be given the chance to do some research about your potential destination. Try to select a country or region that you think will give you the best quality of life, educational experience, and work opportunities. Look over these selections and make your choice.  Student groups will research individual countries with the ultimate goal of ranking the countries in a kind of “desirability index” that indicates which countries they would most like to reside in.

Instructions Each group will be assigned one of six possible countries. You will then use the resources below to try and find specific information about each country: The World Factbook: These websites provide information on the history, people, government, economy, geography, communications, transportation, military, and transnational issues for countries across the globe as well as helpful charts and graphs. www.cia.gov/library/publications/the-world-factbook/index.html http://www.worldbank.org/ https://www.nationmaster.com/ Put all your information on the large poster board/piece of paper.

Information Chart For the country that has been assigned to you, try to find the following information using the sources provided to you in the previous slide. In addition, contribute three categories and statistics that you determine on your own. Try and choose something that will help to explain the economic and/or quality of life conditions in that country. GDP GDP per Capita Literacy Life Expectancy Education expenditures Infant Mortality Rate Industrial Production Growth Rate (the annual percentage increase in industrial production - includes manufacturing, mining, and construction) Unemployment Population % Below Poverty Line Health Expenditures GDP Growth Rate In addition to the categories listed, students are expected to find three categories of their own choosing that they feel might help better illuminate standard of living in their country. Some suggestions for extra categories might be things like: crime or homicide rate, school, life expectancy, physician density, HIV/AIDS rate, obesity rate; % of children under 5 that are underweight, etc. The teacher should help guide groups when needed to choose relevant data categories. The answers are included in slides 8-13 for teacher reference.

Analyzing the data When every group is done, look at all of the data collected by the groups and answer the following question: Rank the countries from 1-6 in order of “Country I Would Most Like to Live In” to “Country I Would Least Like to Live In” Give four reasons explaining your choice for most preferred country Give four reasons explaining your choice for least preferred country Based on the data displayed, give three factors that seem to contribute to a country’s economic success. Based on the data displayed, give three factors that seem to contribute to a country’s economic struggles The intention of gathering this information is that students will likely pick places with a higher per-capita income as being more desirable. They should then be able to equate higher per-capita incomes with more desirable standard of living criteria such as life expectancy, literacy, educational expenditures, etc. The teacher can help clarify conclusions by asking students which categories indicate economic success; which categories inform standard of living; which categories are linked to developing human and physical capital. They can also draw conclusions about the relationship of raw materials to standard of living and that raw materials can be helpful but not critical to economic development. Ultimately, the teacher should help guide students toward making the connection between economic success, higher standards of living, and the development of human and physical capital

Analyzing the data When every group is done, look at all of the data collected by the groups and answer the following question: For the country you did research on, identify three areas where your country might choose to make changes to improve their economy. How does economic success translate to standard of living? Provide 3-5 examples from the data to support your argument. How do GDP and Per Capita GDP differ? To what degree do you think they are important in measuring the economic success of a country? The intention of gathering this information is that students will likely pick places with a higher per-capita income as being more desirable. They should then be able to equate higher per-capita incomes with more desirable standard of living criteria such as life expectancy, literacy, educational expenditures, etc. The teacher can help clarify conclusions by asking students which categories indicate economic success; which categories inform standard of living; which categories are linked to developing human and physical capital. They can also draw conclusions about the relationship of raw materials to standard of living and that raw materials can be helpful but not critical to economic development. Ultimately, the teacher should help guide students toward making the connection between economic success, higher standards of living, and the development of human and physical capital

Country A: Ukraine GDP: $ $369.6 billion (PPP) GDP per capita: $8,800 Population: 43,952,299 Area: 603,550 sq km Natural Resources: iron ore, coal, manganese, natural gas, oil, salt, sulfur, graphite, titanium, magnesium, kaolin, nickel, mercury, timber, arable land. Literacy: 99.8% Life Expectancy: 72.4 years Education expenditures: 5.9% of GDP Infant Mortality Rate: 7.7 deaths/1,000 live births Industrial Production Growth Rate (the annual percentage increase in industrial production - includes manufacturing, mining, and construction): 3.1% Unemployment: 9.2% Population % Below Poverty Line: 3.8% Health Expenditures: 7.1% of GDP GDP Growth Rate: 2.5% The answers are provided on these slides for teacher reference; students should be given the blank “Information Chart” found on slide 6

Country B: North Korea GDP: $ $28 billion GDP per capita: $1,700 Population: 43,952,299 Area: 603,550 sq km Natural Resources: iron ore, coal, manganese, natural gas, oil, salt, sulfur, graphite, titanium, magnesium, kaolin, nickel, mercury, timber, arable land. Literacy: 99.8% Life Expectancy: 72.4 years Education expenditures: 5.9% of GDP Infant Mortality Rate: 7.7 deaths/1,000 live births Industrial Production Growth Rate (the annual percentage increase in industrial production - includes manufacturing, mining, and construction): 3.1% Unemployment: 9.2% Population % Below Poverty Line: 3.8% Health Expenditures: 7.1% of GDP GDP Growth Rate: 2.5%

Country C: China GDP: $ 23.21 trillion GDP per capita: $ $16,700 Population: 1,384,688,986 Area: 9,596,960 sq km sq km Natural Resources: coal, iron ore, petroleum, natural gas, mercury, tin, tungsten, antimony, manganese, molybdenum, vanadium, magnetite, aluminum, lead, zinc, rare earth elements, uranium, hydropower potential (world's largest), arable land  Literacy: 96.4% Life Expectancy: 75.8 years Education expenditures: NA Infant Mortality Rate: 11.8 deaths/1,000 live births Industrial Production Growth Rate (the annual percentage increase in industrial production - includes manufacturing, mining, and construction): 6.1% Unemployment: 3.9% Population % Below Poverty Line: 3.3% Health Expenditures: 5.5% of GDP GDP Growth Rate: 6.9%

Country D: Hong Kong GDP: $ 455.9 billion GDP per capita: $61,500 Population: 7,213,338 Area: 1,108 sq km sq km Natural Resources: outstanding deepwater harbor, feldspar. Literacy: 96.4% Life Expectancy: 83.1 years Education expenditures: 3.3% of GDP Infant Mortality Rate: 2.7 deaths/1,000 live births Industrial Production Growth Rate (the annual percentage increase in industrial production - includes manufacturing, mining, and construction): 1.7% Unemployment: 3.1% Population % Below Poverty Line: 19.9% Health Expenditures: NA GDP Growth Rate: 3.8%

Country E: Switzerland GDP: $ 523.1 billion GDP per capita: $62,100 Population: 8,292,809 Area: 41,277 sq km Natural Resources: hydropower potential, timber, salt. Literacy: 99% Life Expectancy: 82.7 years Education expenditures: 5.1% of GDP Infant Mortality Rate: 3.6 deaths/1,000 live births Industrial Production Growth Rate (the annual percentage increase in industrial production - includes manufacturing, mining, and construction): 4.6% Unemployment: 3.7% Population % Below Poverty Line: 14.4% Health Expenditures: 11.7% of GDP GDP Growth Rate: 3.1%

Country F: South Korea GDP: $ 1.54 trillion GDP per capita: $39,500 Population: 51,418,097 Area: 99,720 sq km Natural Resources: coal, tungsten, graphite, molybdenum, lead, hydropower potential. Literacy: 99% Life Expectancy: 82.5 year Education expenditures: 5.1% of GDP Infant Mortality Rate: 3 deaths/1,000 live births Industrial Production Growth Rate (the annual percentage increase in industrial production - includes manufacturing, mining, and construction): 3.4% Unemployment: 3.2% Population % Below Poverty Line: 6.6% Health Expenditures: 7.4% of GDP GDP Growth Rate: 1.7%

Guess How Much and How For the occupations listed on the right, match the occupation to the  median early salary  that  job  would  earn.

 For each occupation, identify the amount  of schooling required:

 College graduate
 1-3 years of training beyond high school
 High school graduate
 No high school Using the following slide, students will try and match salaries from different professions while also estimating the amount of education necessary for these professions.  This will allow them to connect the concepts of human capital to economic gains.  Higher salaries generally correlate to higher education levels. Students are not expected to research salaries or education; only to make their best guess. This may be assigned to existing groups or individually. The teacher should review the activity with the class after completion. Answers are contained in the notes sections All salary figures come from the BLS website: https://www.bls.gov/oes/current/oes_nat.htm

Answers Professional Salary Schooling 1. Computer Systems Analyst 2.  Registered  Nurse H.  $73,550 A 3.  Housekeeper J.  $24,630 D 4.  Receptionist D.  $29,640 C 5.  Restaurant Cook A.  $26,440 6.  Practical  Nurse L.  $45,710 B 7.  Dispatcher G.  $42,110 8.  Sewing  Machine  Operator F.  $26,250 9.  Mechanical  Engineer K.  $91,500 10.  Dental  Hygienist B.  $74,680 11.  Roofer C.  $42,780 12.  Dietitian E.  $60,150

Exit Ticket Directions: Answer the two questions below Exit Ticket Directions: Answer the two questions below. Circle your answer. Per Capita GDP is one of the best measures of a country’s economic well-being because: Per Capita GDP measures the income of each worker Per Capita GDP takes into account the population of a country Per Capita GDP measures how much of the country is unemployed Per Capita GDP ignores the population of a country All of these things contribute to a country’s economic well-being except: Investments in human capital Large stocks of physical capital Growing populations Large and varied natural resources Hand each student a copy of the above assessment or project the slide and have each student answer individually.  This can be used as an exit ticket to ensure understanding of the main concepts.  Alternately, use this as a bell-ringer the next day