Economics HL
Economics HL
4
Chapters
117
Notes
Unit 1 - Intro To Econ & Core Concepts
Unit 1 - Intro To Econ & Core Concepts
Unit 2 - Microeconomics
Unit 2 - Microeconomics
Unit 3 - Macroeconomics
Unit 3 - Macroeconomics
Unit 4 - The Global Economy
Unit 4 - The Global Economy
IB Resources
Unit 3 - Macroeconomics
Economics HL
Economics HL

Unit 3 - Macroeconomics

GNI vs. GDP: Which Better Measures Economic Well-Being?

Word Count Emoji
658 words
Reading Time Emoji
4 mins read
Updated at Emoji
Last edited on 5th Nov 2024

Table of content

Measuring economic well-being- GDP vs. GNI

  • GDP (Gross Domestic Product): Focuses on output produced inside the country.
  • GNI (Gross National Income): Considers incomes earned by nationals of a country.

Example:Think of GDP as a big cake baked within a country. If it's baked there, it counts for GDP, regardless of who eats it! GNI, on the other hand, cares about who owns the recipe, so even if a cake is baked abroad, if the recipe is owned by someone in your country, it counts for GNI!

Adjustments and comparisons

  • Use real figures to adjust for changing prices over time (not nominal).
  • Divide by population for per capita income (It’s like slicing the cake evenly for everyone).

Pros and cons of per capita income

Pros

  • More output = more access = better, right?

Cons

  • Income Distribution: USA vs. Denmark - Same per capita, different inequality!
  • Environmental Cost: India’s rising income vs. pollution (21 of 30 most polluted cities!).
  • Leisure: 60 hours or 35 hours work weeks? Leisure matters!
  • Wealth: A house or car contributes to well-being.
  • Public Services: Health care and education quality.
  • Disasters & Composition of Output: Gulf oil spill counts positively? Defense spending vs. development?

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IB Resources
Unit 3 - Macroeconomics
Economics HL
Economics HL

Unit 3 - Macroeconomics

GNI vs. GDP: Which Better Measures Economic Well-Being?

Word Count Emoji
658 words
Reading Time Emoji
4 mins read
Updated at Emoji
Last edited on 5th Nov 2024

Table of content

Measuring economic well-being- GDP vs. GNI

  • GDP (Gross Domestic Product): Focuses on output produced inside the country.
  • GNI (Gross National Income): Considers incomes earned by nationals of a country.

Example:Think of GDP as a big cake baked within a country. If it's baked there, it counts for GDP, regardless of who eats it! GNI, on the other hand, cares about who owns the recipe, so even if a cake is baked abroad, if the recipe is owned by someone in your country, it counts for GNI!

Adjustments and comparisons

  • Use real figures to adjust for changing prices over time (not nominal).
  • Divide by population for per capita income (It’s like slicing the cake evenly for everyone).

Pros and cons of per capita income

Pros

  • More output = more access = better, right?

Cons

  • Income Distribution: USA vs. Denmark - Same per capita, different inequality!
  • Environmental Cost: India’s rising income vs. pollution (21 of 30 most polluted cities!).
  • Leisure: 60 hours or 35 hours work weeks? Leisure matters!
  • Wealth: A house or car contributes to well-being.
  • Public Services: Health care and education quality.
  • Disasters & Composition of Output: Gulf oil spill counts positively? Defense spending vs. development?

Unlock the Full Content! File Is Locked Emoji

Dive deeper and gain exclusive access to premium files of Economics HL. Subscribe now and get closer to that 45 🌟