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May 19, 2014 0 Comment

GDP, Gross Domestic Product, is a measure of a country’s current production of goods and services. To be more precise, GDP is the market value of final goods and services produced inside a region within a certain time period. GDP per capita is the result of dividing GDP by the population of the region.

The standard of living of a country mostly depends what people there can enjoy: how many goods and services they will be able to consumer. At the aggregate level, how much an economy is able to produce decides how much its people can consume. Therefore, GDP per capita is an indicator of the average standard of living of the region: higher GDP per capita implies higher standard of living and vice versa. However, as GDP per capita does not measure all things people enjoy, it is not a perfect measure of the standard of living and it is not a perfect measure of happiness.

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