I think you know we are pretty fortunate to live in a developed part of the worl
ID: 1142718 • Letter: I
Question
I think you know we are pretty fortunate to live in a developed part of the world. Even though life in the U.S. can be pretty rough at times, and hardships fall on everyone, close to half the world's population lives on $2.50 a day. In real that means those people have to deal with lack of food, lack of clean drinking water, unstable power supply (if any), high infant mortality, high rates of easily preventable disease like malaria, times of famine and drought, and other challenges we no longer face...
What do you think should be done to get these parts of the global population out of absolute poverty? Have you seen or been a part of any programs that you think do a good job changing conditions in these other parts of the world. And I'm not only talking about charities. Hopefully you saw from part 3 there are many ways to accomplish the goal of reducing world poverty, and charity is only a part. Also are there any programs you see as being grossly inefficient in their efforts to create change? If so what was wrong with them (in economic terms)?
Explanation / Answer
You might wonder why you would bother to listen to this report. Perhaps it looks rather dry
and boring. Yet the performance of the economy has a direct impact on how easy it is to find a
job if you are looking for one, how likely you are to lose your job if you are already employed,
how much you will earn, and what you can buy with the income you receive from working.
Overall economic activity is directly linked to the well-being of everyone in the economy,
including yourself. Should you be worried when you see that real GDP is growing much more
slowly than before? After you have read this book, we hope you will know the answer.
Because real GDP is such a general measure of economic activity, it can also be used to
compare how economies throughout the world are performing. If you have traveled to other
countries, you may have observed big differences in people’s standards of living. If you go to
Canada, France, or Japan, you will generally see relatively prosperous people who can afford
decent food, clothing, and shelter. If you go to Laos, Guatemala, or Malawi, you will see
people living in severe poverty. To understand these differences, we need to understand what
determines real GDP in an economy.