The Measure of Wealth

What factors influence the economy of a country?

Natural resources, investment in human capital and capital resources, and the freedom for individuals to start their own business. ( The FOUR Factors of Production.)

How is the wealth or the economy of a country measured?

GDP stands for Gross Domestic Product. The total market value of all final goods and services produced by a country in a given year.

PUGG Shoes Gross DomesticProduct

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.

When a country invests in capital resources and human capital, the GDP of the country can only go…

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O When a country’s GDP is high, its citizens enjoy a better life, in other words a higher STANDARD OF LIVING.

Standard of Living O The quality of life of the people within a country. O The higher a country’s GDP, the better the quality of life or standard of living. GDP Standard of Living

GDP and Standard of Living What is the relationship? STANDARD OF LIVING Blue- High Green- Medium Red- Low STANDARD OF LIVING Blue- High Green- Medium Red- Low GDP Blue- High Green- Medium Red- Low GDP Blue- High Green- Medium Red- Low

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.

GDP versus GDP PER CAPITA O The Jones O Total income $80,000 O The Smiths O 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?

The Ten Countries with the Lowest GDP/Capita (in hundreds)

The Richest and the Poorest No Data 30,000 plus 20-30, , ,

O MAP GDP /CAPITA MAP GDP /CAPITA