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An overview of the regional averages of GDP per person for developing countries, measured in comparable international dollars as well as population in 2008 ( [link] ), shows that the differences across these regions are stark. As [link] shows, nominal GDP per capita in 2012 for the 581.4 million people living in Latin America and the Caribbean region was $9,190, which far exceeds that of South Asia and sub-Saharan Africa. In turn, people in the high-income nations of the world, such as those who live in the European Union nations or North America, have a per capita GDP three to four times that of the people of Latin America. To put things in perspective, North America and the European Union have slightly more than 9% of the world’s population, but they produce and consume close to 70% of the world’s GDP.

Gdp per capita in u.s. dollars (2008)

This image is a colored map of the world with only a few areas having high GDPs.
There is a clear imbalance in the GDP across the world. North America, Australia, and Western Europe have the highest GDPs while large areas of the world have dramatically lower GDPs. (Credit: modification of work by Bsrboy/Wikimedia Commons)
(Source: http://databank.worldbank.org/data/home.aspx)
Regional comparisons of nominal gdp per capita and population in 2013
Population (in millions) GDP Per Capita
East Asia and Pacific 2,006 $5,536
South Asia 1,671 $1,482
Sub-Saharan Africa 936.1 $1,657
Latin America and Caribbean 588 $9,536
Middle East and North Africa 345.4 $3,456
Europe and Central Asia 272.2 $7,118

Such comparisons between regions are admittedly rough. After all, per capita GDP cannot fully capture the quality of life. Many other factors have a large impact on the standard of living, like health, education, human rights, crime and personal safety, and environmental quality. These measures also reveal very wide differences in the standard of living across the regions of the world. Much of this is correlated with per capita income, but there are exceptions. For example, life expectancy at birth in many low-income regions approximates those who are more affluent. The data also illustrate that nobody can claim to have perfect standards of living . For instance, despite very high income levels, there is still undernourishment in Europe and North America.

Economists know that there are many factors that contribute to your standard of living. People in high-income countries may have very little time due to heavy workloads and may feel disconnected from their community. Lower-income countries may be more community centered, but have little in the way of material wealth. It is hard to measure these characteristics of standard of living. The Organization for Economic Co-Operation and Development has developed the “OECD Better Life Index.” Visit this website to see how countries measure up to your expected standard of living.

The differences in economic statistics and other measures of well-being, substantial though they are, do not fully capture the reasons for the enormous differences between countries. Aside from the neoclassical determinants of growth , four additional determinants are significant in a wide range of statistical studies and are worth mentioning: geography, demography, industrial structure, and institutions.

Questions & Answers

WHY DEVELOP COUNTRIES RELY ON DEVELOPED COUNTRIES?
Ben Reply
what is the determination of aggregate demand?
Maddy Reply
classical dichotomy and its components?
Romaisa Reply
what will happen to the demand curve when there is an inflation in an economy
Hamza Reply
From my view, I think the demand curve will shift inwards.
Bobo
now it depends on what kind of inflation it is, depending on the type of inflation the movement of the demand curve can be stated.
Munimu
yes it depends on the cause for inflation. if it caused by maybe an increase in money supply, the effect is neutral in the long term, therefore there are no effects on total output in the economy, except for an increase in price
Lucas
but short term in general i think you could expect the demand curve to shift inwards as consumers experience a decrease in real income
Lucas
source of capital for the sole trader
Dogbey Reply
borrowing from relatives, government grants, bank loans, personal savings, credit card etc.
Munimu
Suppose you are holding 2000 in a checking account and the price level decrease by 20 %how much it will affect your purchasing power and why
Iqra Reply
Hi Iqra, will answer your question soon.
Aleem
2000*0.2= 400 2000-400= 1600
Munimu
1600
Munimu
a price level decrease is deflation. it means you'll be able to afford to buy more with your 2000 and your real income becomes 2000÷(100-20)=2500
Lucas
the amount will decrease to 1600 and you can't be able to buy over this amount
Agogo
As an economist student discuss how the pandemic covid19 can affect the aggregate demand and aggregate supply thereby leading to decrease in GDP and standard of living of citizens of nigeria
Fadila Reply
hi how can you help me?
qusai Reply
can you send me the notes
Mohd
hello is what are you talking about?
Mousa
unemployment and low inflation    .
Abdirizaq Reply
Structure/Organization Of The Federal Reserve
Abdirizaq
sorry guys in macroeconomics what is different between inflation and intrest rate? please example for pandemic related maybe?
Siyanda
hello
Ramu
Is this Aap for class 11 and 12 only not for graduation?
ankit Reply
yeah like for du MA entrance
VAISHALI
okay
ankit
Aree i m also asking
VAISHALI
for du MA entrance. u shouldn't rely on app. Go for SAURABH SIR notes. available on flipkart.
Saurabh
ohh thanks
VAISHALI
pleasure
Saurabh
ooh
ankit
what is inflation
Bright Reply
hike in price
shola
situation of rise in price with the fall in purchasing power of money
Almina
cycle of corruption
Omkar
rise in price of a Nation economy in terms of trade
adebiyi
what is distruptive international trade?
NOEL
meaning of inflation
Jayakumar Reply
increase in general prices level in an economy.
Tayyab
increase in general price level
Abu
The fall in standard of living because goods and services become expensive.
NOEL
what is value added and how is it used in calculating GDP
Benedicta Reply
value added is final price of output minus cost of production. For example, let's say you make a shirt with raw materials that cost $20, and then sell the shirt for $35 added value would be 35-20=15. In calculating GDP, it is used to avoid double counting goods. Exp. eggs individually and in bread.
julian
as the price of tickets rises from $200 to $250, what is the price elasticity of demand for business travelers, vacationers using midpoint method
Buumba Reply
$300
Jb
@jb how do uget $300
Jeff
It means you are measuring the cost against availability.
Muyiwa
Explain how income taxes and transfer payments are used to stabilize the economy
Nakagwa Reply
reduce demand on scarce resources by reducing money supply.
NOEL

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Source:  OpenStax, Macroeconomics. OpenStax CNX. Jun 16, 2014 Download for free at http://legacy.cnx.org/content/col11626/1.10
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