Question

Your friend at work says the U.S. economy is not doing well: "We are just not a strong economy anymore." You are not entirely convinced by her argument, so you do some research. Here is what you find: There are three major powers in the world economy according to total GDP: China at $21.3 trillion; the EU at $19.2 trillion; and the United States at $18.6 trillion (all in real 2016 dollars). Maybe your friend is right? Then you look at per capita GDP and it does not seem to tell the same story: China per capita GDP is $15,400; EU per capita GDP is $37,800; and U.S. per capita GDP is $57,300. Maybe your friend is wrong? Perhaps we really need to understand what GDP measures and what it does not measure. Using the above facts, make the case that the United States is still economically strong. What does GDP measure and what does that tell us about our country’s economic strength? Do you feel that GDP is valuable in understanding our country’s economic strength? Explain why or why not. Do you believe that there is a better measure of a country’s economic strength that we should also use (in addition to GDP)? Explain your answer. If you don’t think there is, explain why.

Answer 1

According to my friend us economy is not doing well the reason for is perception is based on real GDP, in which America is at third position however he is not right in his perception this is because The Economic Strength of a nation is not determined by real GDP rather by per capita income per capita income what is the income of an individual. What capita income accounts for the average amount of income that person in the country earns. In case of per capita income us is at the top level which means that the individual income is maximum for an American throughout the world when's America's the most strong country in terms of Economic Strength.

GDP measures the value of all goods and services that are produced within the boundary of a country in a given time usually for 1 year. It only indicates the total value of output it does not tells us anything about the individual income .

Yes GDP plays a very important role in determining the Economic Strength of a country however the GDP must be real which means it must be adjusted to the inflation. But per capita income is the best tool to compare two Nation in terms of Economic Strength.

Yes I believe that there are mages like Human Development Index it accounts for Economic Strength as well as the different parameters of livelihood like health education mortality eccetra..