Wealth

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Wealth

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

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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

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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, SP, and GDP.

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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?

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GDP Gross Domestic Product

• Value of all FINAL goods and services produced
  within a countrys borders in a given year
• CIGNxGDP
• 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.

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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.

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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.

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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/Pape
  r Transactions)

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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

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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

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World Population
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World GDP
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USA / World GDP by State
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Per Capita GDP
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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-mexports-imports) is
  biggest inhibitor to growth

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Locate and Label
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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

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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

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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

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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.

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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?

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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

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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.

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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.

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Assessment Rubric
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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

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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