Geography, asked by crankywarden2309, 8 months ago

Use an example to explain why economists measure a country’s economic development by its GDP per capita rather than its total GDP.

Answers

Answered by Anaidiya
21

Answer:

Explanation:

GDP was not designed to assess welfare or the well being of citizens. It was designed to measure production capacity and economic growth. ... It's time to acknowledge the limitations of GDP and expand our measure development so that it takes into account a society's quality of life.

Answered by Hansika4871
0

Economists measure a country’s economic development by its GDP per capita rather than its total GDP due to the following reasons.

  • Gross Domestic Product or GDP, is the sum of all goods and services produced in a country measured in monetary terms.
  • It is calculated by adding the monetary value of all the goods and services produced in a country.
  • GDP per capita is the GDP of a country divided by its total population.
  • It allows economists to calculate the output per person in a country.
  • GDP per capita is a better measure of economic prosperity as it is theoretically the amount of money that each individual gets in that particular country.
  • For example, Consider country A with three people 1, 2, and 3. Say, 1 earns $1000, 2 earns $1500 and 3 earns $2000. The GDP of the country will be $4500. Its GDP per capita or the share of each person will be $1500.
  • Now, consider country B with people 4, 5, 6,7 and 8. 4 earns $500, 5, 6, and 7 earn $1000, and 8 earns $1500. The GDP will be $5000. The GDP per capita or the share of each is $1000.
  • Even though country B has a higher GDP, its citizens earn less and have a lower quality of life.

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