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Why does real GDP per capita provide a better way to compare the economies of two different nation than does real GDP alone?
Wiki User
∙ 8y ago
Usually when we look at GDP, we want to use it as an approximation for one of two things: productivity, or wellbeing. To do so we need to make like comparisons between economies of different sizes. Thus, if we have two nations with GDP's of $1 trillion, but one country has 10 million people, while the other has 100 million, then the first country is actually much more productive, since it is producing the same value with fewer resources, and likely enjoys a much higher standard of living (at least some people do-we don't know about equity from this scenario). The first country produces, and can consume $100,000 in value per person, quite a lot, while the second produces just $10,000 per person, and can consume only that amount.
Wiki User
∙ 11y ago
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In market economies, firms developing new and better products are often able to earn larger than normal profits.
Why have market economies far exceeded all other types of economies in the production of new and better production?
in market economies firm develping new and better products are often able to earn larger than normal profits.
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Comparing countries economics based on their GDP per-capita is better because every country has a different population.
GDP only measure current production according to my lecture notes What is the definition of production. Goods PRODUCED?
GDP per capita reflects the income of individuals, and can be used to compare countries whereas GDP reflects the total income in the economy and can't be used to compare economies with different populations. For example: If the GDP of country A is 100 and country B is 200, it appears that country B is better off. But if country A has a population of 50 and country B has a popultion of 200, then each citizen in country A has an income of 2 and each citizen of country B has an income of 1, so country A is actually better off.
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Why have market economies far exceeded all other types of economies in production of new and better products?
In market economies, firms developing new and better products are often able to earn larger than normal profits.
Why have markets economies far exceeded all other types of economies in the production of new and better products?
In market economies, firms developing new and better products are often able to earn larger than normal profits.
Why have market economies far exceeded all other types of economies in the production of new and better products?
In market economies, firms developing new and better products are often able to earn larger than normal profits.
Why have market economies far exceeded all other types of economies in the production of new and better production?
in market economies firm develping new and better products are often able to earn larger than normal profits.
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