Question

In: Economics

Scenario: In Riverland, life expectancy is rising and has just surpassed life expectancy in its neighbor...

Scenario: In Riverland, life expectancy is rising and has just surpassed life expectancy in its neighbor country, Lakeland.

Refer to the scenario above. This implies that ________.

A) Riverland's per capita GDP has surpassed Lakeland's

B) Riverland's Human Development Index has surpassed Lakeland's

C) Riverland's Human Development Index likely will be greater than Lakeland's if its per capita GDP is greater

and schooling is of similar length and quality

D) Riverland's per capita GDP likely will be greater than Lakeland's if the Human Development Index is

greater

Solutions

Expert Solution

Ans: (C) Riverland's Human Development Index likely will be greater than Lakeland's if it's per capita GDP is greater and schooling is of similar length and quality

Human Development Index consists of three different indices as you can see in the image below

The Human Development Index is the geometric mean of these individual indices

  • The rise and surpassing of life expectancy and that means higher Life expectancy index of Riverland compared to its neighbour Lakeland
  • If GDP per capita for Riverland is higher than Lakeland than Riverland performs well in GNI index also
  • If the situation of schooling is similar in both the countries than the Education Index is indifferent

We know the HDI is geometric mean of these three indices and Riverland is ahead of Lakeland in two of three indices and similar in another one. Therefore, the HDI of Riverland is higher than Lakeland

Good Luck!!

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