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Real GDP per Capita and Economic Development

Explain what economists mean by an increase in real GDP per capita and discuss the extent to which an increase in real GDP per capita will have a positive impact on economic development.


Economic Growth and Development

CIE A Level October/November 2022



Tips on How to Answer Economics Essay

Understand the concepts⬅: Be clear on the meaning of key economic concepts. In this case, understand what real GDP per capita and economic development entail.

Define key terms⬅: Begin your essay by defining the key terms.

Structure your essay⬅: Make sure your essay has a clear structure with an introduction, body paragraphs for each key point, and a conclusion.

Use examples⬅: Use real-life examples or hypothetical scenarios to explain your points.

Analyze⬅: Discuss the positive and negative aspects of the question. Here, analyze the impact of an increase in real GDP per capita on economic development.

Conclude⬅: Summarize your argument in a clear and concise conclusion that answers the essay question.

Proofread⬅: Check for any grammatical errors and ensure your argument flows logically and clearly.

⏩Improved Essay⬅:⏩


Real Gross Domestic Product (GDP) per capita denotes the mean economic output per individual, adjusted for inflation, within a given economy over a defined timeframe. Understanding this concept is critical to comprehending the dynamics of economic growth and development. Consequently, this essay investigates the implications and repercussions of an upsurge in real GDP per capita and its potential influence on economic development.

⏩Understanding Real GDP Per Capita⏩

To capture the essence of economic growth, economists measure the total value of all final goods and services produced within an economy over a specified period, typically a year. This measurement, known as GDP, is then adjusted for inflation to obtain Real GDP, allowing us to scrutinize changes in economic output without the distortions of price changes. The Real GDP is further divided by the total population, giving us GDP per capita, which offers an approximation of the average economic output per person. Therefore, an increase in real GDP per capita signifies not only economic growth but also potential improvement in living standards, as it may infer a higher availability and access to goods and services.

⏩Economic Development⬅: Beyond Economic Growth⏩

Unlike economic growth, which primarily focuses on quantitative changes in a country's economy, economic development encompasses a wider range of variables. It seeks to measure improvements in the overall quality of life, which includes more qualitative aspects such as access to quality education and healthcare, life expectancy, and poverty reduction. These indicators are, in many instances, more challenging to measure accurately than GDP.

⏩Potential Positive Impacts on Economic Development⏩

An uptick in real GDP per capita could stimulate economic development. Higher per capita income could result in more resources being allocated to education and healthcare, subsequently increasing life expectancy and improving living standards. Enhanced resource availability also implies that more goods and services can be procured, contributing to elevated living standards.

⏩Potential Negative Impacts on Economic Development⏩

Despite the potential advantages, an escalation in real GDP per capita may not always translate into economic development. Unrestrained growth can lead to environmental degradation through increased pollution and overuse of natural resources. It may also foster wealth inequality, as the benefits of growth are often not evenly distributed across the population. Furthermore, the pursuit of growth might result in decreased leisure time, leading to a lower quality of life. Another possible downside is unsustainable growth driven by the overuse of scarce resources.


In essence, an increase in real GDP per capita can both propel and hinder economic development. While it can spur improved living standards through increased resource availability, it can also lead to unintended adverse effects such as environmental damage and wealth disparity. As such, it is paramount to aim for balanced, sustainable growth that concurrently considers both economic growth and development objectives, ensuring an equitable distribution of wealth and environmental sustainability.

⏩Tips for the Essay⬅:⏩

1. ⏩Clarity in Definitions⏩⬅: Define the key terms and concepts at the beginning of the essay.
2. ⏩Linkage to Economic Development⏩⬅: Clearly show the linkage between an increase in real GDP per capita and economic development.
3. ⏩Detailed Explanation⏩⬅: Provide a detailed explanation of the positive and negative impacts of an increase in real GDP per capita on economic development.
4. ⏩Evidence-based argument⏩⬅: Use relevant examples or data to substantiate your argument.
5. ⏩Conclusive Summary⏩⬅: Summarize the main points of your argument in your conclusion, addressing the original question.
6. ⏩Proofread⏩⬅: Finally, always remember to proofread your work to ensure that it is grammatically correct and logically coherent.



I. Introduction

Definition and understanding of real GDP per capita.
Brief overview of its impact on economic development.

II. Understanding Real GDP per Capita

Explanation of the calculation of real GDP per capita.
Relation between real GDP per capita and economic growth.
Impact on living standards.

III. Economic Development

Explanation of economic development and its indicators.
The relation between an increase in real GDP per capita and economic development.

IV. Potential Positive Impacts on Economic Development

Increased resources for better education, healthcare, and living standards.

V. Potential Negative Impacts on Economic Development

Negative environmental impacts, wealth inequalities, loss of leisure time, and unsustainable growth.

VI. Conclusion

Recap of the argument and overall assessment of the impact of an increase in real GDP per capita on economic development.





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