Question

In 2000, China’s GDP was ∙$1.2 trillion and its population was 1,280,429,000. By 2010, its GDP was $5.9 trillion and its population size was 1,359,821,000. If GDP is used as a measure of affluence, and technology is held constant, how has China’s impact changed proportionally during those 10 years? How would this be different if China’s GDP had not increased?

Answer 1

Ans: - If GDP is used as a measure of welfare, we would call it good economic growth of China. We know that economic growth is measured by increase in the real per capita GDP. In the year of 2000,China 's per capita income was 937.19 which increased to 4338.81 in the year of 2010. Per capita income may be derived from GDP divided by the population. Thus the Chinese economy has been grown by almost 5 times in the mentioned period. However distribution of income among the people is not expressed here. As a result of this revolutionary change in the manufacturing sector China has become world's economic power.

However if the GDP would not have grown then per capita income was to be lower than before. The standard of living would have been low ,as we know a higher GDP ensures a greater volume of goods and services people can enjoy.