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What is the richest country in the world? The GDP Challenge between Luxembourg, the United States and China

What is this The richest country in the world? It depends on which indicator you have in mind. to me 2022According to the data of the International Monetary Fund United States of America Is the richest country in the world taking into account gross domestic productthe gross domestic product; there China Rather it is the first in the ranking if we take into account GDP to purchasing power parity (GDP at purchasing power parity); While the lowercase letter Luxembourg Based on next GDP. In the video above and in this article we understand what these indicators are and how the richest country in the world can change based on the reference quantity.

Richest country in the world based on GDP

The little word PIL is an acronym gross domestic product In short, it is Wealth That a country produces domestically usually within a year. This wealth has a value that can be summarized in the form expressed as dollar. In English it is called Gross Domestic Product GDP extensionwhich is an abbreviation for gross domestic product.

What is the gross domestic product

For example, in 2022the United State Produced a fortune of approx $25 trillion, more than any other country in the world. This, as we expected, makes the United States of America the richest country in the world based on GDP.

What does it mean that the state “produces” wealth? Simplistic, they are constantly produced and manufactured in a country Goods and services of value Which is bought and sold: vehicles, machinery, food, medical visits, public transportation… If we add The value of all these goods and services, which are usually produced in one year in a given country, we get the wealth produced by that country, and this is precisely its GDP.

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Calculate that, in respect of goods, it is taken into account finished goods. To give you an example, a finished car is taken into account and not the raw materials and materials sold and used in its construction.

The United States is the richest country in the world by GDP

The richest country in the world compared to per capita GDP

To assess the wealth of a country, one can also decide to use the index as an indicator next GDP Based on classification According to the International Monetary Fund, the country with the highest per capita GDP 2022 and the LuxembourgWith 128 thousand dollars.

Per capita is a Latin expression and modal “All”. So “GDP per capita” means “Gross Domestic Product per capita, GDP per capita”. So in Luxembourg, in 2022, each person produced an average wealth of $128,000.

Luxembourg is the richest state in the world based on per capita GDP

To obtain per capita GDP data Just divide: You take a country’s GDP in one year and divide by it the number of its inhabitants. In this way we obtain the wealth produced by an average citizen of that country in that year, or, in other words, we find out The average income of a citizen of that countryWhatever you earn. Obviously, specifically, it’s average. There will be those who had a much higher income that year and those who had a much lower income.

Richest country based on GDP at purchasing power parity

GDP and GDP per capita give us a rough indicator of wealth, but they are incomplete, for several reasons. For example do not take into account the fact that cost of living In one country it can be very different from the cost of living in another. This, however, has dire consequences.

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Let’s make Example With the essential: milk. A gallon of milk might cost $1 in one state and $3 in another. This means that the cost of living in the second case is three times higher.

Cost of living and purchasing power

Assuming that these two countries have the same GDP or the same per capita GDP, it is only natural that in reality The country with the lowest cost of living is the wealthiest For, with the same wealth, more goods can be purchased in that state because it is less expensive.

To take this aspect into account, two more economic indicators called GDP at purchasing power parity And per capita gross domestic product at purchasing power parityalso called GDP to purchasing power parity And Per capita GDP on a purchasing power parity basis.

GDP at purchasing power parity

What is a file Purchasing power? It is the ability to buy more or less products in a given quantity that is available and strictly depends on the cost of goods and services in a particular place or country. By comparing the cost of living in different countries of the world with the cost of living in the United States – which serves as a reference – we have classification One of the richest countries in the world in purchasing power parity.

As for the GDP on a purchasing power parity basis, the China It overtakes the United States in first place by an equivalent of approx 30 trillion dollars of wealth produced in 2022. It is no coincidence: in China, commensurately, products cost much less than in the United States.

China richest country GDP p

However, in connection with GDP per capita purchasing power paritythe Luxembourg It maintains its first place and is already improving the GDP per capita figure. In the 2022 The average wealth per productive individual was approx 142 thousand dollars. This means that, as in China, the cost of living in Luxembourg is slightly lower than in the United States.

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Earl Warner

"Devoted bacon guru. Award-winning explorer. Internet junkie. Web lover."

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