Generating Wealth to Support a Living Standard A Basic Understanding of GDP and HDI

Generating Wealth to Support A Living Standard Wealth can only be generated from the physical and human resources which are available in a society. Wealth can only be generated from the physical and human resources which are available in a society. Availability of resources is based on: Availability of resources is based on: the quality and quantity of the resource in the environment. the quality and quantity of the resource in the environment. whether people know about the resource, (this applies to both physical and human resources) whether people know about the resource, (this applies to both physical and human resources) whether people have the knowledge necessary to exploit the resource; and whether people have the knowledge necessary to exploit the resource; and Resources are also known as the factors of production. These include: Resources are also known as the factors of production. These include: land (natural resources); land (natural resources); capital (money, tools, equipment etc.); capital (money, tools, equipment etc.); labour (& education of labour); labour (& education of labour); entrepreneurship (the organization and/or management of resources and capital for production); entrepreneurship (the organization and/or management of resources and capital for production);

In order to create wealth, resources and the factors of production have to be brought together (transportation) refined and combined by labour and capital into products and services that can be used by consumers. In order to create wealth, resources and the factors of production have to be brought together (transportation) refined and combined by labour and capital into products and services that can be used by consumers. Modern technological societies are possible only when a complex system of political and economic organizations work cooperatively to produce wealth. Modern technological societies are possible only when a complex system of political and economic organizations work cooperatively to produce wealth. Generating Wealth to Support A Living Standard

Factors Of Production: Land Land (natural resources) is the raw materials in their natural state which are used in the production of goods and services (air, minerals, animals, oil, fish, water and soil. Land (natural resources) is the raw materials in their natural state which are used in the production of goods and services (air, minerals, animals, oil, fish, water and soil. Source: Digital Saskatchewan Source: Peter Butala

Factors of Production: Labour Labour is the work done by people in the production of goods and services. A large labour force is required by an industrial nation. It should be trained so it is skilled and operates at a fairly high level of technology Source: Digital Saskatchewan

Factors of Production: Capital Capital is necessary to produce goods and services. Capital is necessary to produce goods and services. Capital is used to generate income that goes towards people’s salaries, wages, and fees. As well as financial capital. Capital is used to generate income that goes towards people’s salaries, wages, and fees. As well as financial capital.

Factors of Production: Entrepreneurship Is the skill and organization necessary to bring all the resources together so that the production of goods and services can occur. Is the skill and organization necessary to bring all the resources together so that the production of goods and services can occur.

Infrastructure Infrastructure consists of a nation's roads, housing, hospitals, schools, etcetera which make possible reasonable living conditions and create a healthy, educated, and trained labour force. Infrastructure consists of a nation's roads, housing, hospitals, schools, etcetera which make possible reasonable living conditions and create a healthy, educated, and trained labour force. Industrial societies have developed a complex system of social organizations which make up an infrastructure (government, healthcare, transportation, etc…). Industrial societies have developed a complex system of social organizations which make up an infrastructure (government, healthcare, transportation, etc…).

Productivity The purpose of an economic system is to enable the production of goods and services. The purpose of an economic system is to enable the production of goods and services. The economic system is the organizational structure by which all production is based on. The economic system is the organizational structure by which all production is based on.

Gross Domestic Product Gross domestic product (GDP), is the unduplicated value of all goods and services produced in a year within Canada’s borders measured at market prices. Gross domestic product (GDP), is the unduplicated value of all goods and services produced in a year within Canada’s borders measured at market prices. It is the standard measure of the overall size of the economy. It is the standard measure of the overall size of the economy.

How Does it Affect Us? You often hear about gross domestic product in the news. The growth in real GDP—that is, GDP after inflation has been taken into account—is often used as an indicator of the general health of the economy. You often hear about gross domestic product in the news. The growth in real GDP—that is, GDP after inflation has been taken into account—is often used as an indicator of the general health of the economy. When real GDP is growing near its long-term potential growth rate—a rate which, in turn, is determined by the underlying growth of the labor force and the capital stock, and the pace of technological change—then the economy is generally in good shape. A negative rate of change in GDP is typically bad news. When an economy produces less than it did in the previous year, it usually means higher unemployment and a lower standard of living for the population. When real GDP is growing near its long-term potential growth rate—a rate which, in turn, is determined by the underlying growth of the labor force and the capital stock, and the pace of technological change—then the economy is generally in good shape. A negative rate of change in GDP is typically bad news. When an economy produces less than it did in the previous year, it usually means higher unemployment and a lower standard of living for the population. GDP is a limited measure insofar as it does not take certain activities into account that are “outside the market”—for example, the value of work done within the home, or by volunteer workers, or the harmful effects on human health from air and water pollution. GDP is a limited measure insofar as it does not take certain activities into account that are “outside the market”—for example, the value of work done within the home, or by volunteer workers, or the harmful effects on human health from air and water pollution.

Human Development Index Human development is about much more than the rise or fall of national incomes. Human development is about much more than the rise or fall of national incomes. It is about creating an environment in which people can develop their full potential and lead productive, creative lives in accord with their needs and interests. People are the real wealth of nations. It is about creating an environment in which people can develop their full potential and lead productive, creative lives in accord with their needs and interests. People are the real wealth of nations. Development is thus about expanding the choices people have to lead lives that they value. And it is thus about much more than economic growth, which is only a means —if a very important one —of enlarging people’s choices. Development is thus about expanding the choices people have to lead lives that they value. And it is thus about much more than economic growth, which is only a means —if a very important one —of enlarging people’s choices.

Human Development Index Fundamental to enlarging these choices is building human capabilities —the range of things that people can do or be in life. Fundamental to enlarging these choices is building human capabilities —the range of things that people can do or be in life. The most basic capabilities for human development are to lead long and healthy lives, to be knowledgeable, to have access to the resources needed for a decent standard of living and to be able to participate in the life of the community. The most basic capabilities for human development are to lead long and healthy lives, to be knowledgeable, to have access to the resources needed for a decent standard of living and to be able to participate in the life of the community. Without these, many choices are simply not available, and many opportunities in life remain inaccessible. Without these, many choices are simply not available, and many opportunities in life remain inaccessible.

HDI in Perspective The following links provide animation which allow a better understanding of the concepts and effects of promoting Human Development. The following links provide animation which allow a better understanding of the concepts and effects of promoting Human Development. HDI Development Trends (2005) HDI Development Trends (2005) HDI Development Trends (2005) HDI Development Trends (2005) Human Development and Income Growth Human Development and Income Growth Human Development and Income Growth Human Development and Income Growth

Conclusion If we could have everything we wanted, would the world be a better place? If we could have everything we wanted, would the world be a better place?