Economic development indicators
In order to assess the economic development of a country, geographers use economic indicators. The most important of these indicators are listed below:
- Gross Domestic Product (GDP) measures the wealth or income of a country. GDP is the total value of goods and services produced by a country in a year.
- Gross National Product (GNP) is another measure of a country's wealth or income. GNP measures the total economic output of a country, including earnings from foreign investments, which are not included in GDP.
- GNP per capita is a country's GNP divided by its population. (Per capita means per person.)
- Economic growth measures the annual increase in GDP, GNP, GDP per capita, or GNP per capita.
- Inequality of wealth is an indication of the gap in wealth and income between a country's richest and poorest people. It can be measured in many ways (eg the proportion of a country's wealth owned by the richest 10% of the population, compared with the proportion owed by the remaining 90%).
- Inflation measures how much the prices of goods, services and wages are increasing each year. High inflation (above a few percent) is believed by many to be a bad thing, and suggests a government lacks control over the economy.
- Unemployment is measured by the number of people who cannot find work.
- Economic structure shows how a country's economy is divided between primary, secondary and tertiary industries.
- Demographics studies population growth and population structure. It compares birth rates to death rates, shows average ages, and compares numbers of people living in towns with numbers living in the countryside. (Many LEDCs have a younger, faster-growing population than MEDCs-, with more people living in the countryside than in towns.), eg the birth rate in the UK is 11 per 1000, whereas in Kenya it is 40.