Flashcards in Emerging And Developing Economies Deck (11)
Which economic indicators effect economic welfare? (7)
1. GDP per capita
4. Gender equality
5. Environmental standards
6. Access to water
7. Extent of welfare state
What is real GDP per capita?
Measures national income/ output & expenditure
Limitations of GDP as a measure of living standards (6)
1. Difficult to measure
2. Negative externality
4. What GDP is spent on
5. Purchasing power parity
6. How hard people work
How is GDP measuring living standards difficult to measure?
Ignores illegal markets
Why is GDP as a measure of living standards show negative externalities?
Includes pollution, a rise overestimates the living standards
Why does measuring living standards with GDP bad for equality?
Ignores distribution of income- many people may be poor but a small minority rich
What GDP is spent on, how can this effect the standard of living?
Depends, if 40% is spent on military then standard of living won't be very high
How does purchasing power parity prevent using GDP to measure living standards?
Comparing in common currency won't get a true comparison
How does how hard people work effect the standard of living?
Working longer for more income may not improve the standard of living
What is Human Direct Index (HDI)?
Alternative measure of economic welfare- takes into account real GDP but also healthcare and education standards