Академический Документы
Профессиональный Документы
Культура Документы
CHANGES IN POLITICAL
ECONOMY
WEEK 5
DETERMINING ECONOMIC
DEVELOPMENT
Gross National Income
Gross national income (GNI) per person measures
the total annual income received by residents of a
nation
Example - Japan, Sweden, Switzerland, and the
U.S. have high GNI, whereas China and India
have low GNI
GNI can be misleading because it does not
consider differences in the cost of living
DETERMINING ECONOMIC
DEVELOPMENT
Purchasing Power Parities
The alternative to using market exchange rates is to use
purchasing power parities (PPPs). The purchasing power of a
currency refers to the quantity of the currency needed to
purchase a given unit of a good, or common basket of goods and
services.
Purchasing power is clearly determined by the relative cost of
living and inflation rates in different countries. Purchasing
powerparitymeans equalising the purchasing power of two
currencies by taking into account these cost of living and inflation
differences.
great empires have been based around trade routes, and these are
almost always maritime.
c) Resources - every country has been dealt a hand in natural resources. It