Transcript PowerPoint-E-International-Comparisons-Nov

PowerPoint E: International Comparisons
Deficit
• A deficit occurs when you have a negative budget balance or
when expenditures exceed revenues.
• The deficit per person is calculated by dividing the total
deficit amount by a country’s population.
• Governments will sometimes chose to have a deficit in order
to try to boost the economy during slower economic times.
Typically this spending or investment includes infrastructure,
which creates jobs, which in turn helps the government
collect money through taxes. In theory, these deficits would
be paid for by an expanded economy during the boom that
might follow.
Employment rate
• The Organization for Economic Co-operation and
Development (OECD) defines the employment rate as the
employment-to-population ratio.
• This is a statistical ratio that measures the proportion of the
country's working-age population (ages 15 to 64) that is
employed.
• A person is considered employed if they have worked at least
1 hour in gainful employment in the most recent week.
Youth unemployment rate
• The unemployment-to-population ratio for those between
15-24 years of age.
• An unemployed person is defined as someone who does not
have a job but is actively seeking work.
• Youth unemployment rates are historically double the adult
rate of unemployment.
International Comparisons – Deficit and Employment
Country
Deficit
Deficit per
person
Unemployment
Youth
Unemployment
Canada
$25.1 billion (CAD)
$694.44
7.0%
13.0%
US
$616 billion (USD)
$1,937.10
4.9%
10.3%
China
334 billion (USD)
$298.48
4.04%
11.1%
India
$90.5 billion (USD)
$78.49
5.0%
12.9%
Greece
$13 billion (USD)
$547.60
23.4%
42.7%
Spain
$74.8 billion (USD)
$1,582.40
25.6%
56.3%
UK
$85.9 billion (USD)
$1,309.12
4.9%
13.5%
National debt
• When you have a deficit, you need to borrow money to cover
the difference between your expenditures and revenue.
• The money that a government borrows and does not repay
becomes its debt.
• The debt per person is calculated by dividing the debt by a
country’s population.
• Governments borrow money from citizens, domestic
institutions holding federal bonds, treasury bills, and have
other forms of debt.
Debt-to-GDP ratio
• Gross domestic product (GDP) is the total value of goods
produced and services provided in a country during one year.
• The debt-to-GDP ratio is a measure of a national
government’s debt in relation to its GDP.
• By comparing what a government owes to what it produces,
the debt-to-GDP ratio indicates the government's ability to
pay back its debt.
• The Organization for Economic Cooperation and Development
(OECD) encourages countries to aim for a debt-to-GDP ratio
below 50.
International Comparisons – Debt and GDP
Country
National debt
Debt per person
Debt-to-GDP ratio
Canada
$642.0 billion (CAD)
$17,833
91.5 %
US
$19.0 trillion (USD)
$58,000
105.2%
China
$4.3 trillion (USD)
$4,054
41.0%
India
$485 billion (USD)
$341
23.8%
Greece
$345 billion (USD)
$33,866
176.9%
Spain
$1.24 trillion (USD)
$25,931
99.6%
UK
$2.0 trillion (USD)
$30,741
89.2%
Discussion Questions
• How do Canada’s finances compare to other
countries around the world?
• Are there other countries with stronger
economies and job prospects than Canada?
• What is the most attractive country to live or
work in long-term?