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

Question

Geography

Tobias

20 February, 15:35

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

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Answers (1)

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Edgar Sandoval · Answer 1

GDP per capita gives individual's economical idea while total GDP is overall analysis of market within country's borders.

Explanation:

Gross Domestic Products (GDP) per capita result after division of country's gross domestic product by its total population therefore considered good analysis for measuring country's standard of living and economic development. While "overall monetary" or "market value" of all the "finished goods" and "services" produced within a country's borders in specific duration is known as total GDP.

GDP per capita is universal due to its tracking components on global scale and provide view regarding economic production value which can be assigned to each individual citizen. For example global per capita GDP grew by an average of 1.905 % in 2018 as per World Bank data. Per capita GDP growth development in China & India took place above the global average in the 21st despite of population hike.