Question

In: Economics

One of the most frequently referred to National Income Accounts is GDP. A chart in Chapter...

One of the most frequently referred to National Income Accounts is GDP. A chart in Chapter 26 Indicates that GDP per capita in the United States is about 4 times that of China. Does that mean that people in the United States are 4 times as well- off as those in China? Explain.

Solutions

Expert Solution

GDP per capita is the aggregate measure and it is not individualistic in nature. Though, a higher GDP per capita one country can be assessed as a higher purchasing power of the consumers of that country, in comparison to the country with lower GDP per capita as people with higher GDP per capita, can buy more health facilities, higher quality goods, more access to the innovative products and superior quality of life. It is also transformed into a lower mortality rates and higher value of quality of life. But, the superiority in getting well off, will not be exactly equal to the number of time of the GDP per capita of one country over the other country. It happens, because of the presence of different kind of regulations, different size of infrastructure, size of human capital pool and other dimensions of the country.

So, a higher GDP per capita of the USA over the Chins is an indication of people in the USA to be well off than that of China, but it is not equal to the 4 times as indicated in the given scenario. Wellbeing, depends upon many other factors  as mentioned above, that are country specific and GDP per capita alone, does not explain these factors.


Related Solutions

National Income The following are some of the national income accounts for the country of Ocean:...
National Income The following are some of the national income accounts for the country of Ocean: Name of accounts Amount (in billion $) Government purchases of goods and services 1721.6 Exports 1096.3 Receipts of factor income from the rest of the world 382.7 Depreciation 990.8 Net fixed investment 6882 Consumption expenditures 6739.4 Indirect business taxes 664.6 Imports 1475.8 Net interests 0 Payments of factor income to the rest of the world 343.7 Inventory changes 56.5 Social security contributions 702.7 Dividends...
Chapter 15 Spending, Income, and GDP 1. The most commonly used measure of an economy's output...
Chapter 15 Spending, Income, and GDP 1. The most commonly used measure of an economy's output is: A. the rate of employment. B. the rate of inflation. C. gross domestic product. D. the Dow Jones stock market index 2. Gross domestic product (GDP) equals the ______ of final _______ produced within a country during a given period of time. A. market value; goods B. market value; services C. market value; goods and services D. quantity; goods and services 3. When...
What is national income accounting?             What is GDP?                       &nbsp
What is national income accounting?             What is GDP?                         How is it calculated?                         What is the difference between real and nominal GDP?             Labor Force                         How is it calculated?                         What does an expanding labor force do to the nations PPF?                                     What about the production mix?                         Can it give a distorted view of the employment situation?
Chapter 2: QuickBooks Chart of Accounts and Chapter 3: QuickBooks Transactions Additionally, please refer to Chapter...
Chapter 2: QuickBooks Chart of Accounts and Chapter 3: QuickBooks Transactions Additionally, please refer to Chapter 2 in your Cengage Accounting eText, accessible from the eText link in the Course Navigation Panel to the left of your screen. Requirement 1: ABC Company adheres to a policy of depositing all cash receipts in a bank account and making all payments by check. The cash account as of December 31 has a credit balance of $1,850, and there is no undeposited cash...
A chart of accounts for a business: Select one: a. lists the accounts in the ledger....
A chart of accounts for a business: Select one: a. lists the accounts in the ledger. b. shows the balance of each account in the general ledger. c. is a graph. d. indicates the amount of profit or loss for the period.
What should be subtracted from GDP to calculate national income? Select one: A. indirect taxes B....
What should be subtracted from GDP to calculate national income? Select one: A. indirect taxes B. net factor payments to the rest of the world C. personal income taxes D. depreciation
Chapter Contents Chapter Review Key Terms and Concepts national income accountingnational income accountinga uniform means of...
Chapter Contents Chapter Review Key Terms and Concepts national income accountingnational income accountinga uniform means of measuring economic performance national income accounting a uniform means of measuring economic performance gross domestic product (GDP)gross domestic product (GDP)the measure of economic performance based on the value of all final goods and services produced within a country during a given period gross domestic product (GDP) the measure of economic performance based on the value of all final goods and services produced within a...
Graph and explain in a paragraph: 1. Income approach to GDP major components (pie chart)
Graph and explain in a paragraph: 1. Income approach to GDP major components (pie chart)
What information is of the most value when creating or modifying the Chart of Accounts? Discuss...
What information is of the most value when creating or modifying the Chart of Accounts? Discuss in 80–100 words. Please: It it include source document, like invoice, purchase order having the information
'Net foreign factor income' in the national income accounts refers to the difference between A) the...
'Net foreign factor income' in the national income accounts refers to the difference between A) the income Americans gain from supplying resources abroad and the income that foreigners earn by supplying resources in the U.S B) the value of the products sold by Americans to other nations and the value of products bought by Americans from other nations C) the value of investments that Americans made abroad and the value of investments made by foreigners in the U.S D) the...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT