GDP per capita
What does GDP per capita measure?
The average economic output per person.
What does GNI per capita include that GDP per capita does not?
Net income from abroad (remittances, foreign investments).
What is PPP used for?
To compare the cost of living between countries.
What is the Big Mac Index used to compare?
Currency value and cost of living.
What does life expectancy measure?
Average number of years a person is expected to live.
How do you calculate GDP per capita?
GDP ÷ population
Is GNI per capita an economic or social indicator?
Economic
If a country has low prices, what happens to its GDP/GNI per capita at PPP?
It increases (people can buy more with the same income).
Why does the Big Mac Index work as a PPP tool?
A Big Mac uses the same ingredients globally → comparable product.
What does adult literacy rate measure?
Percentage of adults who can read and write.
If Country A has a higher GDP per capita than Country B, does it guarantee higher quality of life?
No — GDP per capita does not measure inequality or wellbeing.
Why is GNI per capita better than GDP per capita for countries with many expatriates?
It includes money citizens earn abroad
Why is PPP important when comparing India and Switzerland?
Prices differ greatly, so nominal income is misleading.
If the Big Mac in Turkey is cheaper than in the US, what does that imply about the Turkish Lira?
It is undervalued.
Why is infant mortality rate a key development indicator?
It reflects healthcare quality, nutrition, and sanitation.
Why can two countries with the same GDP per capita still feel very different in living standards?
Differences in cost of living / prices (PPP).
Name one weakness of GNI per capita as a measure of development.
Hides inequality, ignores informal sector, no info on health/education
PPP is mainly used when comparing:
a) Total GDP
b) GDP per capita
c) Exchange rates
b) GDP per capita.
Name one criticism of the Big Mac Index.
Big Mac availability varies; not everyone eats it; cultural differences.
Why is average years of schooling more useful than literacy rate?
It shows access to sustained education, not just basic reading ability.
Name one limitation of using GDP per capita as the only measure of development.
It ignores inequality, informal economy, health, education, or quality of life.
Why might oil-rich countries show high GNI per capita but still have low human development in some regions?
Wealth may be unevenly distributed, and social services may be underdeveloped.
What is one limitation of PPP calculations?
Data collection is difficult; prices vary within countries; basket of goods differs.
If a country’s Big Mac price is high, what can it indicate about the country?
Higher cost of living / stronger currency.
Why do health and education indicators give more meaningful insights than economic indicators alone?
They reveal quality of life, human development, social wellbeing.