Development is an increase in the standard of living of the people in a country. It includes economic factors, such as wealth, and social factors such as literacy.
Both social and economic indicators can be used to determine if a country is developed or developing, and to identify the main similarities and differences between them.
Economic indicators of development
These measure the economic output or wealth of a country. They include Gross National Product (GNP) per person, which is the value of goods produced by a country divided by the total population to give an average income for each citizen.
Problems with looking at only one indicator such as GNP are:
This is an average and so may be easily skewed by a few very wealthy families which may mask extreme poverty for the majority of the population.
It does not take into account the cost of goods which affects what people can buy with their wages.
How wealthy a country is does not take into account how this money is used as it does not show data on how well educated people are or how good their diet is.