Generating Wealth to Support a Living Standard

1
Generating Wealth to Support a Living Standard

• A Basic Understanding of GDP and HDI

2
Generating Wealth to Support A Living Standard

• Wealth can only be generated from the physical
  and human resources which are available in a
  society.
• Availability of resources is based on
• the quality and quantity of the resource in the
  environment.
• whether people know about the resource, (this
  applies to both physical and human resources)
• whether people have the knowledge necessary to
  exploit the resource and
• Resources are also known as the factors of
  production. These include
• land (natural resources)
• capital (money, tools, equipment etc.)
• labour ( education of labour)
• entrepreneurship (the organization and/or
  management of resources and capital for
  production)

3
Generating Wealth to Support A Living Standard

• In order to create wealth, resources and the
  factors of production have to be brought together
  (transportation) refined and combined by labour
  and capital into products and services that can
  be used by consumers.
• Modern technological societies are possible only
  when a complex system of political and economic
  organizations work cooperatively to produce
  wealth.

4
Factors Of Production Land

• Land (natural resources) is the raw materials in
  their natural state which are used in the
  production of goods and services (air, minerals,
  animals, oil, fish, water and soil.

Source Digital Saskatchewan
Source Digital Saskatchewan
Source Digital Saskatchewan
Source Peter Butala
5
Factors of Production Labour

• Labour is the work done by people in the
  production of goods and services.
• A large labour force is required by an industrial
  nation.
• It should be trained so it is skilled and
  operates at a fairly high level of technology

Source Digital Saskatchewan
Source Digital Saskatchewan
6
Factors of Production Capital

• Capital is necessary to produce goods and
  services.
• Capital is used to generate income that goes
  towards peoples salaries, wages, and fees. As
  well as financial capital.

7
Factors of Production Entrepreneurship

• Is the skill and organization necessary to bring
  all the resources together so that the production
  of goods and services can occur.

8
Infrastructure

• Infrastructure consists of a nation's roads,
  housing, hospitals, schools, etcetera which make
  possible reasonable living conditions and create
  a healthy, educated, and trained labour force.
• Industrial societies have developed a complex
  system of social organizations which make up an
  infrastructure (government, healthcare,
  transportation, etc).

9
Productivity

• The purpose of an economic system is to enable
  the production of goods and services.
• The economic system is the organizational
  structure by which all production is based on.

10
Gross Domestic Product

• Gross domestic product (GDP), is the unduplicated
  value of all goods and services produced in a
  year within Canadas borders measured at market
  prices.
• It is the standard measure of the overall size of
  the economy .

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How Does it Affect Us?

• You often hear about gross domestic product in
  the news. The growth in real GDPthat is, GDP
  after inflation has been taken into accountis
  often used as an indicator of the general health
  of the economy.
• When real GDP is growing near its long-term
  potential growth ratea rate which, in turn, is
  determined by the underlying growth of the labor
  force and the capital stock, and the pace of
  technological changethen the economy is
  generally in good shape. A negative rate of
  change in GDP is typically bad news. When an
  economy produces less than it did in the previous
  year, it usually means higher unemployment and a
  lower standard of living for the population.
• GDP is a limited measure insofar as it does not
  take certain activities into account that are
  outside the marketfor example, the value of
  work done within the home, or by volunteer
  workers, or the harmful effects on human health
  from air and water pollution.

12
Human Development Index

• Human development is about much more than the
  rise or fall of national incomes.
• It is about creating an environment in which
  people can develop their full potential and lead
  productive, creative lives in accord with their
  needs and interests. People are the real wealth
  of nations.
• Development is thus about expanding the choices
  people have to lead lives that they value. And it
  is thus about much more than economic growth,
  which is only a means if a very important one
  of enlarging peoples choices.

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Human Development Index

• Fundamental to enlarging these choices is
  building human capabilities the range of things
  that people can do or be in life.
• The most basic capabilities for human development
  are to lead long and healthy lives, to be
  knowledgeable, to have access to the resources
  needed for a decent standard of living and to be
  able to participate in the life of the
  community.
• Without these, many choices are simply not
  available, and many opportunities in life remain
  inaccessible.

14
HDI in Perspective

• The following links provide animation which allow
  a better understanding of the concepts and
  effects of promoting Human Development.
• HDI Development Trends (2005)
• Human Development and Income Growth

15
Conclusion

• If we could have everything we wanted, would the
  world be a better place?