1. Measuring Wealth Socials 9

2. Measuring the Wealth of Countries: GNP Organizations such as the World Bank use an annual calculation called Gross National Product (GNP) to measure a country’s wealth Organizations such as the World Bank use an annual calculation called Gross National Product (GNP) to measure a country’s wealth The GNP is the sum total of the country’s Gross Domestic Product (GDP), or income earned from all domestic goods and services, plus the net income earned on foreign investments The GNP is the sum total of the country’s Gross Domestic Product (GDP), or income earned from all domestic goods and services, plus the net income earned on foreign investments GNP= GDP+ net income on foreign investments

3. Measuring the Wealth of Countries: GNP continued.. Usually, the GNP for a country is divided by the country’s total population to provide a figure called GNP per capita, or for each person Usually, the GNP for a country is divided by the country’s total population to provide a figure called GNP per capita, or for each person GNP per capita= GNP/country’s total population GNP per capita= GNP/country’s total population Some economists use per capita GNP to measure a country’s standard of living, or the average degree of material comfort that a country’s people enjoy Some economists use per capita GNP to measure a country’s standard of living, or the average degree of material comfort that a country’s people enjoy Per Capita GNP US$765 are LLDC’s Per Capita GNP US$765 are LLDC’s Per Capita GNP US$766-US$9385 are LDC’s Per Capita GNP US$766-US$9385 are LDC’s Per Capita GNP US$9386 are MDC’s Per Capita GNP US$9386 are MDC’s

4. Measuring the Health of Countries: The Human Development Index Some economists state that measuring a country’s standard of living by per Capita GNP solely is misleading Some economists state that measuring a country’s standard of living by per Capita GNP solely is misleading This is because the method ignores pockets of terrible poverty that exist in some MDC’s and the pockets of wealth that exist in many LDC’s This is because the method ignores pockets of terrible poverty that exist in some MDC’s and the pockets of wealth that exist in many LDC’s Second, money should not be the only criterion of a nation’s well being; social factors such as education levels, life expectancy, gender equality, and freedom from persecution apply Second, money should not be the only criterion of a nation’s well being; social factors such as education levels, life expectancy, gender equality, and freedom from persecution apply

5. Measuring the Health of Countries: The Human Development Index continued… There have been a number of attempts to devise a more complete system of measuring a country’s standard of living There have been a number of attempts to devise a more complete system of measuring a country’s standard of living Today, the most common and authoritative measurement of living standards is the United Nations Human Development Index Today, the most common and authoritative measurement of living standards is the United Nations Human Development Index Each year, the UN releases its Human Development Report, which includes a list that ranks every country in the world according to three basic factors: Each year, the UN releases its Human Development Report, which includes a list that ranks every country in the world according to three basic factors: 1) Longevity (life expectancy) 1) Longevity (life expectancy) 2) Knowledge (literacy rates and educational attainment) 2) Knowledge (literacy rates and educational attainment) 3) Income (GDP per capita) 3) Income (GDP per capita)