Lesson 1 - My Country Does What?

Concepts: Standard of Living Gross Domestic Product (GDP) GDP per Capita Purchasing Power Parity

Objectives - Lesson 1

Identify roles & responsibilities

Objectives of IES

Define GDP per Capita

Utilize GDP per Capita as a measure of living standards

Your Role = Economic Advisors

Must know a great deal about your country

Economic, social and political structures

What would be the consequences for having incomplete or incorrect information?

Consequences of Incorrect Information

Missed opportunities

Wrong conclusions

Poor results

Closed-minded attitude

ResearchQuality of research may

affect:

Opinions & beliefs

Strategic plan

Your perceptions about how the world works

Tools & Resources Player’s Guide:

Details about simulation

Project assignments

IES Bulletin Board

Team members

IES Website:www.frbsf.org/education/

Links to sites for research

“STANDARD OF LIVING”

WHAT DOES THIS PHRASE MEAN?

MAY REPRESENT MANY DIFFERENT THINGS

NEED CONSISTENT DEFINITION

“STANDARD OF LIVING”

Gross Domestic Product GDP

Measure to represent standard of living for a country

Amount of economic activity in a country is reflected in GDP

Gross Domestic Product - GDP

Definition:

Market value of all goods & services produced within a country over a specific period of time (1 year)

GDP Example US & Canada

GDP 2007 US $13.8 trillion Canada $1.3 trillion

US economy is larger based on dollar amounts

How do living standards compare?

Why is US economy larger?

GDP Per Capita (Per Person)

Definition:

GDP divided by the population of the country

= An average $$ value of

goods & services produced by each person in the country

GDP Example US & Canada 2007 Canada

GDP $1.3 trillion

divided by

Canada population33 million=

$39,195

United StatesGDP $13.8 trillion

divided by

United States population300 million

= $45,845

Dollar value is goods & services produced on average by each person

GDP Per Capita (Per Person)

Widely used measure of living standards

Straightforward to calculate

Wondering about your country & its standard of living?

Purchasing Power Parity (PPP)

Costs of goods & services equalized across countries

Calculation complicated

Comparisons between countries = GDP PPP

Comparisons within a country = GDP

Mini-Summit Participant Responsibilities:

Understand objectives, rules, new concepts, vocabulary & resources

How?

Take notes – Cornell

Review notes

Study new vocabulary & concepts

More about the Mini-Summit

Opportunity to develop Soft Skills:

Teamwork

Leadership

Project Management

Communication

Negotiation

And FUN, FUN, FUN!!!