Assignment

What is the definition of GDP and GDP per capita? What was the value of GDP and GDP per capita for the US and China in 2014? What was the GDP growth rate for the US and China in 2014?

Introduction

GDP (Gross Domestic Product) refers to the descriptive measure of a country’s economic value. Regardless of criticism leveled against GDP as a tool to measure the state of the economy, GDP remains the most preferred parameter to measure financial state. Notably, GDP captures all commodities and services of a country for a certain period (“Difference Between GDP and GDP per Capita | Difference Between | GDP vs. GDP per Capita,” 2019). GDP illustrates the country’s economic state, and it usually obtained annually and quarterly.  While GDP per capita results from GDP measure divided by a country’s total population. Theoretically, GDP per capita calculates amount each citizen in a country can get. Therefore, GDP per capita tends to provide a precise measure of living standards of the people when compared with GDP.

China’s GDP in 2014 was at $10,534,526 million, and this was a sharp increase of $ 899,501 from 2013. In 2014, China’s GDP per capita was at $ 7,702, which was an increase of $ 621 from the previous year.

In the same year, United States recorded a GDP of $ 17,521,700 million, and this was the world’s biggest economy. The US recorded an increase of $ 736,800 from 2013. Therefore, the US and China’ GDP  were ranked position one and two respectively for the 196 countries ranked. In terms of GDP per capita, the US recorded $ 54,952 in 2014 which was rise by $1,920 from 2013. The US growth rate of GDP was 2.5 percent in the year 2014, while China’s GDP rose by 7.3 percent from the previous year.

In conclusion ideally, a country’s income is directly proportional to population increase which translates to GDP increase. Nevertheless, high GDP does not automatically bring a better living standard of living. Economic growth does not always lead to economic development as other dynamics exist.

References

Difference Between GDP and GDP per Capita | Difference Between | GDP vs. GDP per Capita. (2019). Retrieved from http://www.differencebetween.net/business/difference-between-gdp-and-gdp-per-capita/

Qian, Z. (2014). Implications of GDP accounting for factor income share in China. China Economic Review, 30, 370-382. doi: 10.1016/j.chieco.2014.06.012