Your friend at work says the U.S. economy is not doing well: “We are just not a strong economy anymore.” You are not entirely convinced by her argument, so you do some research. Here is what you find:
- There are three major powers in the world economy based on their estimated total Real GDP for 2017 : China at $23.12 trillion; the EU at $19.97 trillion; and the United States at $19.36 trillion. (See https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html ). Maybe your friend is right?
- Then you look at GDP Per Capita (PPP) for 2017 and it does not seem to tell the same story: China per capita GDP is $16,600; EU per capita GDP is $39,200; and U.S. per capita GDP is $59,500. (See https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html ). Maybe your friend is wrong?
Perhaps we really need to understand what GDP measures and what it does not measure?
Use the facts above to make the case that the United States is still economically strong. Answer the following questions:
- What does GDP measure and what does that tell us about our country’s economic strength?
- Do you feel that GDP is valuable in understanding our country’s economic strength? Explain why or why not.
- Do you believe that there is a better measure of a country’s economic strength that we should also use (in addition to GDP)? Explain your answer. If you don’t think there is, explain why.