Explain Why Comparing the G.D.P. of Various Nations Might Not Tell You Which Nation Is Better Off. Use Information from the World Bank Website to Support Your Answers. in Your Explanation Refer to the Limitations of
Topic 2 Explain why comparing the G. D. P. of various nations might not tell you which nation is better off. Use information from the World Bank website to support your answers.
In your explanation refer to the limitations of using G. D. P. as a measure of economic welfare and where possible, refer to the countries in your table above. Due to the very complex methods used in estimating gross domestic product and the sheer enormity of the task, gross domestic product is very necessarily a less than perfect measure of a nation’s economic pulse.Nonetheless, measured gross domestic product certainly plays a very critical role in influencing government economic and social policies.
Therefore, there is, quite appropriately, some degree of concern that a false impression of a nation’s material wellbeing may result from an imperfectly measured gross domestic product (Layton, Robinson, and Tucker 2009). According to the World Bank website, Australia has (US$) $924,843,128,521 GDP in year 2009 and the total of 22,328,800 population in the year 2010 (World Bank 2012).Economic growth is considered to be good because it allows people to have a higher standard of living, to have more material of goods. However, an increase in real GDP or per person, real GDP does not tell us whether the average citizen is better off or not. The problem is that there measure say nothing about how income is being paid.
The national economy may be growing, but the poor people may be staying poor, and the rich people may be getting richer and richer.As so, looking at the economic growth, it may benefit only some groups of people more than others. Moreover, it is entirely possible that despite national economic growth some groups can be worse off than they were before. Obviously, neither per person in real GDP or real GDP accurately measures the standard of living for all of the nation’s population. Another reason that real GDP and per capita real GDP are misleading is that neither says anything about the quality of life.People have nonmonetary needs such as; they care about personal freedom, the environment, and their leisure time.
If a rising per capita GDP does hand in hand with repressive political regime or a rapidly deteriorating environmental quality, people are nothing going to feel better off; by the same token, a country could have no economic growth, yet reduce the hours worked each week. More leisure time could make workers feel better off, even though per person GDP has not changed (Boyes and Melvin 2008).For example, we would like to show the graph of the money flow for three different countries, USA, China, and Japan. This is the GDP for the money flow of each country, as we can see that USA is the richest country in this graph, following by China, and then Japan. However, if we divide the money flow of the each country with the each country’s population, we will get As we can see, USA and Japan people are having about the same wealth of living about 10 times more than Chinese people (The Tree of Mamre 2011).And with a calculation of the Australian GDP and the population according to the World Bank website, Australia has the lower rank of Japan, Australia, after calculation is $42,131(2009) which makes Australia is the 19th out of the world (World Bank record 1990-2010) (World Bank 2012).
As shown, the GDP of each country does not mean that the country is rich, it has to be depended both, GDP itself and GDP per population.Monaco has only about 35,407 populations in 2010 however after divided into per capita is $172,676 (World Bank 2012). In conclusion, we cannot judge neither of the country is running good just because the country has more exports than others. However we have to look deep into the country’s population and see if the citizens are having good quality of life or not by dividing the country’s money flow with the total country’s population.As we have given the easy to understand table context to see about USA, China, and Japan of their country’s money flow, and the result has come up with USA’s and Japan’s citizens are have about the similar quality of life, and China is kind of suffering referring to the number of population of the country. References Boyes, W & Melvin, M 2008 “The Problem with Definitions of Growth”, 7th edition, Cengage Learning, Inc, Boston Layton, A, Robinson, T & Tucker, IB 2009, “Economics for Today”, 3rd Asia Pacific Edition, Cengage AustraliaPty Limited, Sydney World Bank 2012, GDP (current US$), viewed 29 January 2012, http://data.
worldbank. org/indicator/NY. GDP. MKTP. CD Tree of Mamre, 2011 Why The US Is Still The Number One Economy In The World, And Will Remain So For A Very, Very Long Time, viewed 29 January 2012, http://treeofmamre. wordpress.