TAILIEUCHUNG - Ten Principles of Economics - Part 50

Ten Principles of Economics - Part 50. Economics is the study of how society manages its scarce resources. In most societies, resources are allocated not by a single central planner but through the combined actions of millions of households and firms. Economists therefore study how people make decisions: how much they work, what they buy, how much they save, and how they invest their savings. Economists also study how people interact with one another. | CHAPTER 22 MEASURING A NATION S INCOME 507 Table 22-3 Country Real GDP per Person 1997 Life Expectancy Adult Literacy United States 29 010 77 years 99 Japan 24 070 80 99 Germany 21 260 77 99 Mexico 8 370 72 90 Brazil 6 480 67 84 Russia 4 370 67 99 Indonesia 3 490 65 85 China 3 130 70 83 India 1 670 63 53 Pakistan 1 560 64 41 Bangladesh 1 050 58 39 Nigeria 920 50 59 GDP Life Expectancy and Literacy. The table shows GDP per person and two measures of the quality of life for 12 major countries. Source Human Development Report 1999 United Nations. IN THE NEWS Hidden GDP Measuring a nation s gross domestic product is never easy but it becomes especially difficult when people have every incentive to hide their economic activities from the eyes of government. The Russian Economy Notes from Underground By Michael R. Gordon If you want to know what is happening in the Russian economy it helps to think about bread. Government statistics show that people are eating more bread and bakeries are selling less. Or consider vodka. Distillers are able to produce far more vodka than is officially being sold. But given the well-deserved Russian fondness for vodka there is every reason to think the distilleries are operating at full capacity. The Russian Government s top number crunchers say the contradictions are easy to explain high taxes government red tape and the simple desire to sock away some extra cash have driven much of Russia s economic activity underground. For the last six years the Russian economy has been going down down down. But as President Boris N. Yeltsin tries to deliver the growth he has promised economists are taking a closer look at the murky but vibrant shadow economy. It includes everything from small businesses that never report their sales to huge companies that understate their production to avoid taxes. Government experts insist that if the shadow economy is taken into account the overall economy is finally starting to grow. In turn Mr. Yeltsin s critics .

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