Transcript Macro #8: Standard of Living

Macro #8: Standard of Living
Quality of Life:
What is needed for a
good quality of life?
List 10+ things.
Macro #9: Comparing Nations
Productivity
• Labor productivity: how much each
worker produces
• Increases in productivity are due to:
1. Technology
2. Capital deepening: increase in amount of
capital goods available per worker (more
machines = more production)
3. Educated & skilled workforce
4. Other factors: loyalty to job, motivation of
worker
Developing Countries
• Poorest Nations
• Developing
Nations : low
standard of living
due to little human
or physical capital
• What do these
countries have in
common?
Problems:
• Traditional economies
– Subsistence farming: grow just enough to
survive, but not to trade
– Wealthy control cash crops: coffee, sugar,
peanuts
• Human Resources:
– Lack of skilled, experienced workers
– Lack of education
• Low literacy rates
• Natural Resources:
– Little arable (productive)land
– Lack of water or infrastructure to make it
obtainable
– Lack of natural resources
• One crop economy: only makes 1 thing thus
reliant on price of just 1 product
• Capital Resources
– Don’t have the capital to invest & can’t borrow
– Microloans
Richest Countries – by GDP
• 10 Richest
• Developed
Countries or
Industrialized
Nations: highest
standards of
living
GDP per capita
• Amount produced
per person
• GDP per capita
• Indicates the level of
the standard of living
– BUT – cannot show if
the wealth is evenly
distributed
With only 300,000 and rich
oil reserves, Qatar is one
of the richest nations on
earth!
What is a high standard
of living?
• Is it money or stuff? Or is a feeling of
happiness or success?
• Happiest Countries
• Murder Rate
After looking at all this data,
where would you like to live?
Explain.