Question

What can two countries with similar gdp’s have greatly differing average levels of material well being

Answer 1

Answer:

Two countries with a very similar gdps can have great difference in the average material well being when the two countries have wide difference in their population and in their national debts.

Explanation:

The Gross domestic product of a country shows the overall asset a country has without removing the national debt. This average wellbeing if the citizen in a country depends on the per capita income of that country, the higher the PCI the better is the expected wellbeing. The cpi is calculated by dividing the gdp by the population in the country, therefore even when two countries have the same gdp, but very huge difference in their population, it will lead to different per capita income. The country with the smaller population will have higher per capita income and better material wellbeing.

Secondly, when the countries have the same gdp and population, the difference in their national debt will lead to difference in available material wellbeing in the countries.