Why Is Gdp Per Capita Useful as a Measure of Living Standards?

Why is gross domestic point of intersection per capita useful as a circular of living standards? gross domestic product itself doesnt reflect the well-being of race in the kingdom; therefore gross domestic product per capita is used to round living standards. It bankers bills the match output of a country and divides it by the number of volume living in it. Higher GDP per capita is interpreted as having a higher(prenominal)(prenominal) standard of living. In 2004, Chinas GDP was $1938 billion and Denmarks was $220 billion, scarce Denmarks GDP per capita was $40,750 while Chinas was $1500. thus we ar fit to depict that Denmarks living standards be significantly higher than those in China, since the norm income for each individual in Denmark is some(prenominal) higher. This then tells us that GDP only is not the allow measure of living standards, as it measures the total output of the thriftiness whereas GDP per capita focuses solely on the income of the citi zens as a whole. on that point are some limitations of using GDP per capita as a measurement for standard of living. For example it is a mean repute and does not reflect income distribution, therefore pith that it doesnt dramatise into tarradiddle the fact that there are significantly higher earners than others, as wealth is not distributed disturbly deep down an thriftiness.

wherefore in this instance, median income is a more than useful measure of wealth than per capita income, as it divides households into two equal segments with the first half of households earning less than the median household income and the other half ea rning more. It is considered to be a bette! r indicator than the average household income as it takes into account the uneven distribution of income within the economy, whereas GDP per capita is only if an average. Also, GDP per capita does not take into account the hidden economy and non-market goods and services; for example factory workers who capture a guerrilla job driving an unlicensed go at night, plumbers who capture broken water pipes for clients or drug dealers who negotiate gross revenue with prospective...If you want to get a full moon essay, do it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay