Relationship Between Capita And Social Progress

-The nation’s GDP is a good measure of its economic well being and progress because it represents the total value of all goods and services produced in an economy, and what a country produces and what it consumes are nearly identical.

What does the AK growth model lead you to expect about the relative growth of rich and poor countries?

Indonesia had a GDP of 868.3 billion international dollars (GDP of Indonesia, 2016) and a GDP per capita of 3,475.25 international dollars in 2013 (GDP per capita, Indonesia, 2016). The GDP is primarily used to indicate an economies performance, it is measured by Y = C + I + E + G, where Y = GDP, C = Consumer Spending, I = Investment made by industry, E = Excess of Exports over Imports, G = Government Spending (Birch T, 2016). The GDP per capita is calculated by the GDP of a country, divided by the population of a country. The GDP and GDP per capita are very vital indicators of an economies progress. A rise in GDP shows that there an increase of value in an economy or there is a higher income or rise in expenditure which implies that there is a rise in the standard of living of the citizens and due to rise in income there will be a higher spending on various goods and services like healthcare, education, etc. Therefore as Australia’s GDP is higher than Indonesia’s there is an indication of higher living

Fast economic growth allows an increase in real GDP per capita. Real wages can rise and households can enjoy a higher disposable income, which positively means there will be higher material living standards.

It should be noted that GDP does not measure the sustainability of growth which is necessary to continue development.

“How many economists does it take to change a light bulb? None. If the light bulb needed changing the market would have already done it.”-Any website with economic jokes. However, the method that the market mentioned is being measured is neither the best nor the only way to measure economic progress of a country. Page 200 of Naked Economics quotes, “Any measure of economic progress depends on how you define progress. GDP just adds up the numbers. There is something to be said for that.” I believe that the narrator is giving a caveat that GDP is simply the culmination of numerical values from consumption, investment, government spending, and net exports and despite being useful, should not be the primary measurement of economic progress. Wheelman also states that any alternative measurement tools vary based on different people’s judgement of what to take into account. Similarly, I agree with Wheelman. I believe that there are instances where focusing on raw

The development gap refers to the financial and social disparity between the poorest and wealthiest in society. Where economic indicators are low, social indicators are often also low, whereas the wealthiest countries also enjoy better healthcare and education. This gap has been widening for decades and is at its widest today. The poor are not necessarily getting poorer; in fact nearly everybody has seen an improvement in quality of life over the last 20 years. The reason the gap is widening is because the richest are getting richer and having their quality of life improve at a far quicker rate.

While economic growth can bring many benefits such as increased consumption power, improved public services and reduction of unemployment. Having a higher economic growth can also cause income inequality and stress. So those might not lead to high standard of living. Inclusive is when there’s more equality. When there’s growth in the sectors where the poor work and help to reduce the prices of consumption items that the poor consume so the United Kingdom is inclusive and Thailand is exclusive in economic growth. There’s a negative correlation between income inequality and economic growth. When there is income inequality the poor is very poor and the rich is very rich. The economy grows when a lot of people spend but the small percentage of

Robert F Keneddy speech on GDP highlighted the unique aspects associated with the understanding of GDP. The speech talked about the meaning and importance of GDP and the misinterpretations that are often attached with the concept. He was of the view that accumulation of material things has remained a main focus of economic agents and doing so community values and community excellence are often compromised. In his speech he presented an important concept that GDP cannot be used as a measure of welfare of wellbeing of the economy because it does not take into account the health of individuals, their standard of living, quality of education provided to the individuals etc. In this way it is not a good option to rely on GDP while having an idea about the development of an economy.

Take Bangladesh (8th most populous country on earth) for example, with a population half that of the United States but a GDP(Gross Domestic Product) that is 141 times smaller and that gap is only getting

Making adjustments to these methods and communicating their importance in an efficient way are going to be important in the future to get more individuals behind the idea. I do question alternatives to GDP because not everyone weighs things the same when it comes to wellbeing therefore the use of these methods nationally or even locally might be unjustifiable.

This is really worrying, because GDP misses a lot of factors that affect in the standard of living of people. For example, GDP only focuses in what is being produced, but does not worries how this product are being produced and why they are produced that way, so many companies to lower the cost of production, use unsafe methods that end up producing harm to the earth. An example of these are the companies that use coal to make electricity. The amount of pollution they expel into the nature is really high. According to Carrington (2015), ¨The International Energy Agency calculates that one in four of these sub-critical plants must close within five years, if the world’s governments are to keep their pledge to limit global warming to 2C¨. This problem not only affects the environment, but also has an effect on people’s lives. The quality of life of the society as a whole is lowered because of the pollution, people may suffer from cancer or respiratory diseases. And if the production of electricity gets higher then GDP also rises, but the quality of life is getting lower. It also does not consider non-market transactions, an example being when you hire someone to tutor your child in math, GDP takes into account this transaction and therefore GDP rises, but what if you do on your own? Many people complain about this, because in this case GDP does not take into account what is being measured. Also volunteering work is not included in the GDP. But it does not end there, any transaction made in the black market, because is not reported, it’s left out. As mentioned before, GDP do not take in to consideration the distribution of income in society, as a consequence of this GDP cannot distinguish if the GDP is rising for good reasons like more investment or more income, or for bad reasons. Therefore the inequality in society is not projected in the

From the earliest days of civilized society, each generation seeks to advance their lives to be easier, more efficient, or more productive in one way or another. This advancement, this growth, this knowledge increase is also known as development. As societies developed and the concept of money was introduced, personal wealth was seen as the most common way to measure success and prestige. The GDP (Gross Domestic Product) per capita measure was introduced to compare living conditions between countries. However, comparing wealth cannot be the only measure of assessing how developed group of people are. In order to understand development, the best social welfare function measures how empowered people are on average to a long life where they have

The regression also seeks to control for anomalies such as those of Azerbaijan and Georgia by including the size of the industry in terms of export value (expvalT and expvalC). GDP per capita (GDPcapita), accessed from the World Bank (2015) data source, is also a control due to its ability to indicate the average wage, which is a determinant of cost competitiveness and potentially a major contributor to growth. It can also serve to measure the economic development of the nation

In earlier times Gross Domestic Product was one of the main indicators to measure a country’s wealth. Gross Domestic Product (GDP) is defined as the total value of all the goods and services produced by a nation in any given year ("Is the Gross Domestic Product (GDP) a Good Measure of Prosperity?"). There are two ways of calculating a country’s GDP. The first is the income approach which is calculated by adding the wages of workers, income from rent, interest and profits. The second, more common form of calculating GDP, is the expenditure approach. Here GDP totals consumption expenditure, investment, government spending and net exports. GDP statistics are considered to reflect a county’s economic output which could possibly lead to growth. However GDP is a measure of income and it should not be confused with wealth. Which is why most modern economists do not consider GDP to be a good measure of a