Class 6 - GDP: A Graph of the Rich Getting Richer

In our sixth class, we explored the wondrous world of power point!

First we discussed what GDP (gross domestic product) was: the dollar value of goods and services in our economy and the ability to consume things we buy. The world average GDP per capita is around $10,500. We saw how the world didn't get rich until about 200 years ago during the industrial revolution. The spread between the richest and poorest countries was only different by a factor of nine. Today that factor is 75. A small percentage change in GDP is a huge change in living standards. This led to the Rule of 72 which describes how long it will take for an investment to double given a fixed growth. 72 divided by the growth gives you the time.

We then discussed how people get rich. We produce more, we trade more, and we have people take care of us.

We talked about world population and how the world can actually hold 1 trillion people. The world today can actually fit in Texas.

Extensive growth is when something new is invented, it is shared among people. This causes the producers to spend more and people then spend their money on getting the new things.

We ended the class showing how African GDP is behind everyone else by almost a factor of 20. This just shows how America and Europe took advantage of the poor countries. The rich get richer at the expense of the poor. However the Economist in 2011 discovered the six of the ten fastest growing countries are in the sub-saharan region so Africa may finally be catching up.