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Wealth

Wealth. GDP Analysis: World Geographic Economic Differences Keith L. White/RSK HS TC, Arizona Geographic Alliance. Macroeconomics. The part of economics that looks and deals with the economy as a whole Population and labor force, education and training Economic systems and politics

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Wealth

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  1. Wealth GDP Analysis: World Geographic Economic Differences Keith L. White/RSK HS TC, Arizona Geographic Alliance

  2. Macroeconomics • The part of economics that looks and deals with the economy as a whole • Population and labor force, education and training • Economic systems and politics • Resources and trade • Economic Indicators

  3. Economic Indicators • Used to “check the health” of an economy • Comparative to other countries and economic systems • Over 50 economic indicators: most popular and common: CPI (Inflation), Unemployment claims, Housing starts, Inventory, DJIA, S&P, and GDP.

  4. Why does the USA have great wealth? • Most of the worlds population suffers with limited education opportunities, poor health care, unclean drinking water, limited conveniences, few employment options, no home ownership. • How can we compare the USA to other world countries?

  5. GDP: Gross Domestic Product • Value of all FINAL goods and services produced within a country’s borders in a given year • C+I+G=Nx=GDP • Consumer spending + Business Investment (and Inventory) + Government Purchases = Net Exports (Exports – Imports or x – m) = GDP • In USA GDP is calculated by US Dept. of Commerce.

  6. Get Real! Real vs. Nominal GDP • Real GDP is adjusted for inflation if you are comparing growth to previous years. • Nominal GDP is current GDP that is not adjusted for inflation and would not be accurate compared to previous years.

  7. GDP or GNP? • GDP measure all final goods within a countries borders regardless of ownership. With globalization, it is much more accurate on a comparative basis • Gross National Product calculates by countries ownership inside and outside of borders which dilutes in production accuracy and analysis and is rarely used today my most economic sources.

  8. GDP: What is NOT included? • Intermediate Goods • Illegal Activities (Stolen Goods, illegal drug trade, prostitution, etc.) • Unpaid “non market” activities (Chores, household, charity, unpaid labor, etc.) • Used goods • Gifts, loans, welfare, taxes (nothing produced) • Financial Transactions (Stock Market/Deposits/Paper Transactions)

  9. Who Cares? • GDP is a major leading economic indicator of the health in an economy. • A growing GDP is reflective of “good health” and prospering economy • A declining GDP is reflective of a “sick” economy usually accompanied by high unemployment, low wages, poverty, homelessness, hunger and suffering

  10. Comparative GDP • Per capita = population / nominal GDP • Compare per capita (per person) • China and India both have a healthy, fast growing GDP and estimates should they will pass us the USA within 20-years. HOWEVER: • China and India have huge populations and when divided into their nominal GDP the per capita comparisons are much more accurate

  11. World Population

  12. World GDP

  13. USA / World GDP by State

  14. Per Capita GDP

  15. USA • 2006 Nominal GDP = 13 trillion plus • Population = 300 million (Approx.) • Per Capita GDP = $43,444 • Real GDP (adjusted for inflation has enjoyed steady growth of 3-5% year • Growing US trade deficit (x-m=exports-imports) is biggest inhibitor to growth

  16. Locate and Label:

  17. Top 10 Per Capita GDP (2007) CIA World Fact Book (www.cia.gov) 1- Luxembourg 80,800 2- Qatar 75,900 3- Bermuda 69,900 (UK) 4- Jersey 57,000 (UK) 5- Norway 55,600 6- Kuwait 55,300 7- UAE 55,200 8- Singapore 48,900 9- USA 46,000 10-Ireland 45,600

  18. Bottom 10 Per Capita GDP (2006) CIA (www.cia.gov) 221- Central African R 700 222- Niger 700 223- Ethiopia 700 224- Solomon Islands 600 225- Comoros 600 226- Somalia 600 227- Guinea-Bissau 600 228- Liberia 500 229- Zimbabwe 500 230- Dem Rep Congo 300

  19. Other Per Capita GDP of Interest (2007) CIA (www.cia.gov) • 184- Haiti 1,900 (Lowest in NA) • 165- India 2,700 • 130 China 5,300 • 85- Mexico 12,500 • 75 Russia 14,600 • 34- Japan 33,800 • 21- Canada 38,200

  20. World Map Activity • Using a blank world map and Atlas for reference: find and label the 10 ten and bottom 10 per capita GDP countries. • Shade each group using a color key • Identify and label on the world map 5-more per capita GDP countries you are interested in.

  21. Interrelationships & Meaning • What are possible geographic, economic, resource, or political reasons for a high per capita GDP? • What are possible geographic, economic, resource, or political reasons for a low per capita GDP? • What steps could be taken to assist a country with a low per capita GDP?

  22. Geographic Connections to low GDP • Natural disasters and destruction • Politics and disputes, wars, turmoil • Poor health care options (mortality rate) • Poor education opportunities, employment training • Private property rights/land ownership • Economic Freedom/profit motive • Location and natural resources • Low production rates • Climate changes/weather issues

  23. World Bank • One of the primary functions of The World Bank is to lend money for capital improvements to low per capita GDP producing nations. • Loans are used to educate the labor force, train in food production and distribution, utilize and develop available resources, invest in transportation and utility infrastructures.

  24. Overnight Research Assessment • Select a country in the bottom 50 of per capital GDP. • Research the nominal GDP, current population, labor force, mortality rate, and resources available. (www.cia.gov go to the fact book) • Write a 1 page letter to The Word Bank requesting consideration for a 10-billion dollar loan. • Begin the letter with a overview of your country, its location, and current problems. • Conclude the letter with an explanation why the loan would help develop your country and improve the standard of living for your population.

  25. Assessment Rubric

  26. Arizona Extensions & US GDP • How does Arizona contribute to the US GDP growth? • Tourism • Farming (Cotton, Vegetables, Citrus) • Ranching (Cattle, Sheep) • Mining (Copper, Silver, Gold) • Housing construction/growth • Electronics manufacturing

  27. GDP Closure • Per Capita GDP shows relative comparisons • Poverty, unemployment, hunger, homelessness, and standard of living • Continent of Africa suffers with many countries very poor • China and India nominal GDP vs. per capita GDP

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