Factors Influencing GDP
How do levels of human and physical capital,
natural resources, and entrepreneurship
influence a country’s GDP?
OBJECTIVES
Students will be able to:
• define key terms such as entrepreneurship, GDP per capita, gross
domestic product, human capital, literacy rate, natural resources,
physical capital, standard of living.
• explain how changes in a particular factor will influence the GDP of
a country.
• analyze economic data and identify to which type of resource the
data refers.
• compose a written piece giving evidence to support which factors
seem to have the most significant effect on GDP.
THE FED EXPLAINED…
REAL VS. POTENTIAL GDP
ORGANIZE YOUR CARDS AND WORK WITH
YOUR GROUP TO SORT THEM
Human
Capital
India
China
Japan
Germany
United
Kingdom
Russia
Physical
Capital
Entrepreneurship
Natural
Resources
KEY TERMS
Human capital is…
A measure of the economic
value of an employee's skill set.
KEY TERMS
Physical capital is…
Physical capital refers to any manufactured
asset that is applied production, such as
machinery, buildings, or vehicles
KEY TERMS
Entrepreneurship is…
The process of identifying and starting a new
business, bringing together the required
resources, while taking both the risks and rewards
associated with the business.
KEY TERMS
Natural resources are…
The gifts of natural available for production of
goods and services
KEY TERMS
Literacy rate is…
The percentage of the adult population who can
read, write, and use printed material
KEY TERMS
Gross Domestic Product is…
-The total value of all final goods and services produced in
an economy within a given time period.
GDP per Capita is…
-The GDP of a country divided by the country’s population
and serves as a common way to measure standard of living
Standard of Living
-The level of material wealth enjoyed by the average person
within an economy
ANSWERS TO GDP AND GDP/CAPITA
(PPP 2013)
India
GDP =
$4.962 Trillion
GDP/Capita = $4,000
Japan
GDP =
$4.729 Trillion
GDP/Capita = $37,100
China
GDP =
$13.37 Trillion
GDP/Capita =
$9,800
Germany
GDP =
$3.227 Trillion
GDP/Capita =
$39,500
United Kingdom
GDP =
$2.378 Trillion
GDP/Capita = $37,300
Russian Federation
GDP =
$2.553 Trillion
GDP/Capita = $18,100
DEBRIEFING QUESTIONS
Which factors influencing GDP seemed to be the most important in
determining GDP in the countries you analyzed?
What, if any, relationship exists between the Literacy Rate of a country
and that country’s Standard of Living as measured by GDP per capita?