Download Literacy Rate and GDP

Literacy Rate
and GDP
Literacy Rate
• Literacy rates looks
at the percentage of
people over 15 in a
country who can
read and write.
• Most developed
countries have high
literacy rates
Cycle of Poverty
• Having basic reading and writing skills is very important.
• Without skills, workers are stuck in the lowest paying
jobs
• Illiterate people take these low paying jobs and
cannot afford their children’s education…cycle
continues for generation
• Standard of living remains low because education
level is low
• Developing counties more likely to have a greater
illiterate population
GDP= Gross Domestic Product
• The total market value of all final
goods and services produced within
the country in a year
• Per Capita means how much money
each individual would receive IF a
country divided its yearly income
equally among everyone
• GDP Per Capita is a measure of
wealth with the wealth of other
nations
• Raising GDP increases standard of
living
What affect does Literacy rates have on
GDP?
Does Literacy rate
of a country seem
to have an impact
on
- GDP per
capita?
- Life
expectancy?
WHY????
What other factors may affect GDP per
capita?
•
•
•
•
•
•
Political Issues
Government corruption
Government Type
Uneducated population
Natural resources
Wars
What other factors may affect GDP per
capita?
• Wars
• Famine
• Drought
• Natural Disasters
So, how does literacy rate affect the
standard of living in countries?
•Normally, the higher the literacy
rate the higher the GDP per
capita.
Four factors of Economic Growth
•Natural Resources
•Human capital
•Capital
•Entrepreneurship
Natural Resources
• “Gifts of nature”
• Important to countries- without them,
countries must import resources they
need (costly)
• Countries with a lot of natural resources
are able o use them to produce goods and
services or trade with other countries to
make money for the economy
• Renewable sources: generated from
natural sources, clean. Ex: sun, wind,
hydroelectric power
• Nonrenewable sources: generated from
the earth, causes damage to
environment to retrieve/when used. Ex:
oil, coal, Earths minerals
Human Capital
• The health, strength, education, training, and
skills that people bring to their jobs.
• Countries invest in human capital when they:
• Invest in education
• Invest in training workers in different skills
• Invest in healthcare
Human Capital
• What do you think would be an example of human
capital?
• How can a country invest in human capital?
• Do you think a country would be wise to invest in human
capital? Why or why not?
• What is the relationship between Human capital and
GDP?
• Do you think our chart supports this?
Capital Goods
• Capital goods- all of the factories, machines,
technologies, buildings, equipment needed by businesses
in order to operate
• The more capital goods a country has = the more goods
and services they are able to produce= the more money
they make.
• Ex:
Entrepreneurship
• People who start businesses
• These people risk their own money and time because
they believe that their business ideas will make a
profit
• They create jobs and bring together natural resources,
human capital and capital goods together to make
different types of goods and services
• The more entrepreneurs a country has, the higher the
country’s GDP will be