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Chapter 32: Q. 2. (page 781)

What are the drawbacks to analyzing the global economy on a regional basis?

Short Answer

Expert verified

Regional comparisons are broad-based and may not adequately capture an individual country's economic attribute.

Step by step solution

01

Step 1. Aggregate per capita income.

Aggregate per capita income vary widely across countries because a region can have both high and low income countries.

02

Step 2. Explanation

Because of variation in the per capita income, accurate representation of countries is difficult if the analysis is done on a regional basis. A region has both high and low income countries., so an aggregate data for the region would not represent all the countries accurately. In North America, US and Canada are high income while Haiti, and Honduras are low-income.

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Most popular questions from this chapter

Create a table that identifies the macroeconomic policies for a high-income country, a middle-income country, and a low-income country.

Retrieve the following data from The World Bank database (http://databank.worldbank.org/data/ home.aspx) for India, Spain, and South Africa for the most recent year available:

• GDP in constant international dollars or PPP

• Population

• GDP per person in constant international dollars

• Mortality rate, infant (per 1,000 live births)

• Health expenditure per capita (current U.S. dollars)

• Life expectancy at birth, total (years)

Show, using the AD/AS model, how governments can use monetary policy to decrease the price level.

Using the data in Table 32.3, rank the seven regions of the world according to GDP and then according to GDP per capita.

What is the primary way in which economists measure standards of living?
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