Economics Assignment GDP and HDI
Added on 2020-05-08
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Economics
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Economics Assignment 1ECONOMICS ASSIGNMENTBy (Student’s Name)Professor’s NameCollegeCourseDate
Economics Assignment 2Question 1: The GDP is ineffective welfare measure. GDP doesn’t reflect the true economy health. Acompressive measure like HDI is required since GDP fails to integrate welfare measures. GDPsolely describes the value of all finished products produced within a country over a period oftime. None of GDP’s computation method include indicators of welfare. GDP is a proxy of aproxy measure hence lacks validity as welfare (Kubiszewski et al. 2013). It only include markettransactions but disregards voluntary/domestic work with considerable impact on welfare whichenhance living standards. GDP excludes black market transactions and unlawful activities withadverse impacts on welfare. In comparing the welfare of any two countries utilizing GDP per capital and the UN’sHDI, the following two images are used in terms of literacy level. The 2006 figures can be usedto compare the GDP and HDI. Based on 2006 figures retrieved from:http://www.nationmaster.com/country-info/stats/Economy/GDP , the figures indicate that UnitedStates ranks number one with a GDP of $13.2 trillion (current USD), whereas Japan comes nextwith $4.34 trillion, Germany with $2.90 trillion and China with $2.60 trillion. These countries atthe topic take the lead in terms of activities happening within their borders but doesn’t essentiallymean that their populace are better off than the remaining countries in terms of the overalwelfare.
Economics Assignment 3HDIfigures(drawnfrom:http://www.nationmaster.com/country-info/stats/Economy/Human-Development-Index) indicatethat Norway ranks top with highest HDI of 0.963, Iceland follows with HDI of 0.956 andAustralia third with 0.955, Canada, Luxembourg and Sweden are tied at fourth position with0.949. Niger is last with HDI of 0.281. Since HDI is relatively more detailed than GDP,countries that ranks high in GDP take lower ranks with HDI. As US is merely rank 10th, Japan11th, Germany 20th and China eighty-fifth. This is because HDI includes additional indicatorsthereby allowing it provide a better image of state of well-being of the populace of a country.Citizens in Norway live longer lives than US citizens. Norway has a life expectancy at birth of82.9 years in 2006 while US life expectancy merely stood at 77.70 years.Question 2:The investment spending by firms is determined by the rate of interest criterion. Lowrates of interest have always stimulated the housing construction while construction is reducedby higher rates of investment. There is a reciprocal relationship between the interest rates and theinvestment in the residential establishments in both Australia and the United States. Such a
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