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Exploring Human Development Index (HDI) and Gross National Income (GNI)

Understand the disparities in development among countries through the Human Development Index (HDI) and Gross National Income (GNI). Learn how these metrics measure living standards, health, education, and economic output.

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Exploring Human Development Index (HDI) and Gross National Income (GNI)

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  1. Unit 6: Industrialization and Economic Development Chapter 9: Development Chapter 11: Industry and Manufacturing

  2. Chapter 9: Development Key Issue #1: Why does development vary among countries?

  3. Chapter 9 Key Issue #1 1. Growing Food2. Manufacturing Products3. Providing Services 3 basic ways to earn a living

  4. Chapter 9 Key Issue #1 1. Growing Food2. Manufacturing Products3. Providing Services 3 basic ways to earn a living

  5. Chapter 9 Key Issue #1 1. Growing Food2. Manufacturing Products3. Providing Services 3 basic ways to earn a living

  6. Chapter 9 Key Issue #1 Human Development Index (HDI) • Measures the Development of a country (MDC vs. LDC)

  7. Chapter 9 Key Issue #1 Human Development Index (HDI) • Measures the Development of a country (MDC vs. LDC) • Started by the U.N. in 1980 so all of the statistics are relatively new

  8. Chapter 9 Key Issue #1 Human Development Index (HDI) • Measures the Development of a country (MDC vs. LDC) • Started by the U.N. in 1980 so all of the statistics are relatively new • Computed every year

  9. Chapter 9 Key Issue #1 Human Development Index (HDI) • Measures the Development of a country (MDC vs. LDC) • Started by the U.N. in 1980 so all of the statistics are relatively new • Computed every year • Highest score is 100% or 1.0

  10. Chapter 9 Key Issue #1 Human Development Index (HDI) 2014 Rankings • Norway .944 • Australia .935 • Switzerland .930 • United States .915 • Mexico • Niger .348

  11. Chapter 9 Key Issue #1 Human Development Index (HDI) 2014 Rankings • Norway .944 • Australia .935 • Switzerland .930 • United States .915 • Mexico • Niger .348

  12. Chapter 9 Key Issue #1 Human Development Index (HDI) 2014 Rankings • Norway .944 • Australia .935 • Switzerland .930 • United States .915 • Mexico • Niger .348

  13. Chapter 9 Key Issue #1 Human Development Index (HDI) 2014 Rankings • Norway .944 • Australia .935 • Switzerland .930 • United States .915 • Mexico • Niger .348

  14. Chapter 9 Key Issue #1 Human Development Index (HDI) 2014 Rankings • Norway .944 • Australia .935 • Switzerland .930 • United States .915 8.

  15. Chapter 9 Key Issue #1 Human Development Index (HDI) 2014 Rankings • Norway .944 • Australia .935 • Switzerland .930 • United States .915 • Mexico .756 8. 74.

  16. Chapter 9 Key Issue #1 Human Development Index (HDI) 2014 Rankings • Norway .944 • Australia .935 • Switzerland .930 • United States .915 • Mexico .756 • Niger .348 8. 74. 188.

  17. Chapter 9 Key Issue #1 HDI Considerations • Decent Standard of Living

  18. Chapter 9 Key Issue #1 HDI Considerations • Decent Standard of Living • A Long and Healthy Life

  19. Chapter 9 Key Issue #1 HDI Considerations • Decent Standard of Living • A Long and Healthy Life • Access to Knowledge

  20. Chapter 9 Key Issue #1 Human Development Index (HDI) Four Classes of Development • Very High Developed • High • Medium Less Developed • Low

  21. Chapter 9 Key Issue #1 Human Development Index (HDI) Four Classes of Development • Very High (80% +) or .800 – 1.000 • High (70% - 80%) or .700 – .799 • Medium (55% - 70%) or .550 – .699 • Low (below 55%) or .000 – .549

  22. Chapter 9 Key Issue #1 Gross National Income (GNI) • The value of the output of goods and services produced in a country in a year, including money that leaves and enters the country

  23. Chapter 9 Key Issue #1 Gross National Income (GNI) • The value of the output of goods and services produced in a country in a year, including money that leaves and enters the country • Accounts for all of the money earned by the people of a country, no matter where that money was earned.

  24. Chapter 9 Key Issue #1 Gross National Income (GNI) • Nike is headquartered in the USA, but the shoes are produced in China. The profits(after expenses) for the sale of those shoes, no matter where they’re sold, would count toward USA’s GNI

  25. Chapter 9 Key Issue #1 Gross National Income (GNI) • Nike is headquartered in the USA, but the shoes are produced in China. The profits(after expenses) for the sale of those shoes, no matter where they’re sold, would count toward USA’s GNI • The wages to the workers in China would count towards China’s GNI

  26. Chapter 9 Key Issue #1 Gross National Income (GNI) • GNI is not a perfect system because it does not account for distribution of wealth. It only measures the wealth of a nation as a whole. • GNI measures “mean” wealth. • There are 8 kids in the class • 7 of the kids have no money • Johnny has $800.00 • The GNI of the class is $100.00 per student because GNI does not account for distribution of wealth

  27. Chapter 9 Key Issue #1 Gross National Income (GNI) • GNI is not a perfect system because it does not account for distribution of wealth. It only measures the wealth of a nation as a whole. • GNI measures “mean” wealth. • There are 8 kids in the class • 7 of the kids have no money • Johnny has $800.00 • The GNI of the class is $100.00 per student because GNI does not account for distribution of wealth

  28. Chapter 9 Key Issue #1 Gross National Income (GNI) • GNI is not a perfect system because it does not account for distribution of wealth. It only measures the wealth of a nation as a whole. • GNI measures “mean” wealth. • There are 8 kids in the class • 7 of the kids have no money • Johnny has $800.00 • The GNI of the class is $100.00 per student because GNI does not account for distribution of wealth

  29. Chapter 9 Key Issue #1 Gross Domestic Product (GDP) • The value of the output of goods and services produced in a country in a year, but it does not account for money that leaves and enters the country

  30. Chapter 9 Key Issue #1 Gross Domestic Product (GDP) • The value of the output of goods and services produced in a country in a year, but it does not account for money that leaves and enters the country • Value of all the goods and services produced within a country (whether that country keeps the money or not)

  31. Chapter 9 Key Issue #1 Gross Domestic Product (GDP) • It doesn’t matter that Nike is headquartered in the USA, those shoes are produced in China and will count toward China’s GDP.

  32. Chapter 9 Key Issue #1 Gross Domestic Product (GDP) • It doesn’t matter that Nike is headquartered in the USA, those shoes are produced in China and will count toward China’s GDP. • All that matters is where they are produced, hence, Gross Domestic PRODUCT

  33. Chapter 9 Key Issue #1 GNI vs. GDP • In summary…

  34. Chapter 9 Key Issue #1 GNI vs. GDP • In summary… • GNI is WHO makes the money • (which country are they living/from?)

  35. Chapter 9 Key Issue #1 GNI vs. GDP • In summary… • GNI is WHO makes the money • (which country are they living/from?) • GDP is WHERE the item is produced • (which country does the work?)

  36. Chapter 9 Key Issue #1 Purchasing Power Parity (PPP) • An adjustment made to the GNI to account for differences among countries in the cost of goods • Adjustment made to GNI based on the cost of living • Rent in the United States is much higher than it is in Botswana • $300 per month there may be equivalent to $1,000 per month here

  37. Chapter 9 Key Issue #1 Purchasing Power Parity (PPP) • An adjustment made to the GNI to account for differences among countries in the cost of goods • Adjustment made to GNI based on the cost of living • Rent in the United States is much higher than it is in Botswana • $300 per month there may be equivalent to $1,000 per month here

  38. Chapter 9 Key Issue #1 Purchasing Power Parity (PPP) • An adjustment made to the GNI to account for differences among countries in the cost of goods • Adjustment made to GNI based on the cost of living • Rent in the United States is much higher than it is in Botswana • $300 per month there may be equivalent to $1,000 per month here

  39. Chapter 9 Key Issue #1 Inequality-Adjusted HDI (IHDI) • Modifies the HDI to account for inequality within a country

  40. Chapter 9 Key Issue #1 Inequality-Adjusted HDI (IHDI) • Modifies the HDI to account for inequality within a country • Perfect Equality = HDI and IHDI are the same

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