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Comparing Economies

Comparing Economies. © Karen Devine 2008. Grounds for comparison. Economies can be compared in the following areas: Economic growth Size of the economy Employment and unemployment Quality of life Environmental quality Role of the government. The size of the economy and economic growth.

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Comparing Economies

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  1. Comparing Economies © Karen Devine 2008

  2. Grounds for comparison • Economies can be compared in the following areas: • Economic growth • Size of the economy • Employment and unemployment • Quality of life • Environmental quality • Role of the government

  3. The size of the economy and economic growth • The overall level of economic output or GDP is used to measure economic growth. • Yet, GDP per capita is a more reliable indicator of the distribution of the income of a nation.

  4. The size of the economy and economic growth • Some nations, such as Luxembourg, have a relatively high GDP per capita, whilst other nations such as Burkina Faso, have a relatively low GDP per capita.

  5. The size of the economy and economic growth • The biggest influences on GDP per capita are the: • size of GDP • size of the population.

  6. Employment and Unemployment • Unemployment levels vary between nations. • The unemployment level indicates: • The success of a nation’s macroeconomic policies • The level of economic growth within a nation.

  7. Quality of life • The physical quality of life of citizens varies widely between nations.

  8. Quality of life • The factors that contribute to the quality of life are the: • quality of health care • quality of education • technological access • cost of living • working hours • treatment of women • government intervention in daily life

  9. Environmental Quality • Some nations are rich with natural resources and have the ability to extract them for use. • Other nations lack natural resources or the potential to extract them. • Yet, the key question for most nations is “What is sustainable use of resources?”

  10. Environmental Quality • Nations vary in how they protect and preserve their environments. • Australia only recently signed the Kyoto Protocol (2008) which binds the government to decreasing Greenhouse Gas Emissions. • Yet, the USA (the world’s largest emitter) has not signed this agreement.

  11. Environmental Quality • The world has called for environmental changes in the areas of: • renewable energy sources • recycling • preservation and protection • greenhouse gas emissions

  12. The Role of Government • Governments always debate the pros and cons of government intervention vs deregulation. • Governments can also vary in the way they either promote or hinder economic freedoms.

  13. The Role of Government • Governments can provide a variety of public services or allow the private sector to fund them including: • health care • education • welfare

  14. Question Time? • Compare a very wealthy nation with a very poor nation in all the previously discussed areas.

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