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Use an example to explain why economists measure a country’s economic development by its GDP per capita rather than its total GDP.

An example of why economists measure a country’s economic development by its GDP per capita rather than its total GDP is the comparison between the United States and India. The United States has a much higher total GDP than India, but India has a higher GDP per capita. This is because the population of India is much larger than the population of the United States. Therefore, GDP per capita is a better measure of economic development because it takes into account the size of the population and provides a more accurate picture of the economic well-being of the citizens of a country.

Did you know?

Did you know that economists measure a country's economic development based on its GDP per capita rather than its total GDP? This is because GDP per capita provides a more accurate reflection of a country's standard of living. For example, imagine two countries with the same total GDP. However, in one country, the population is significantly larger than the other. By solely looking at total GDP, it would be easy to assume that both countries have an equal economic development. However, when we consider GDP per capita, we can see that the country with a smaller population actually has a higher standard of living. This is because the wealth generated in that country is being distributed among a smaller number of people, resulting in a higher GDP per capita. By using GDP per capita, economists can better gauge the overall economic well-being of a country.