How we measure the size of the economy of countries?

How we measure the size of the economy of countries?

The economic power of the state affects the state’s political, military power, the well-being of its citizens, affects its international standing and the power of its decision

What criteria are used to measure the size of the economy:

  • Gross Domestic Product (GDP): Economists consider it the best way to measure the performance of economic countries, which is the total value of final goods and services produced by the state economy over a given period of time.
    Means goods and services that are actually consumed and not goods and services used as intermediaries in the production process and also excludes goods that are sold on the black market and goods produced and sold at home and are calculated at the time of production and not necessary when sold or resold

Gross Domestic Product = Consumer Consumption + Government Expenditure + Investments – Trade Balance (Exports – Imports)
According to this standard, the United States ranks first with a total domestic product of $ 19.4 trillion

  • GDP per person: This is the gross domestic product divided by the population. This standard is used to determine the level of productivity of the citizens of that country. It also expresses the level of well-being. However, if the state’s economy is income, the income of the state is derived from what is extracted from the land and sold, This indicator does not give a real perception of the productivity of the individual. According to this classification, Qatar ranks first with a GDP per person of $ 129,894.
  • The economic growth rate, which is the percentage increase in GDP, which is measured in percent of GDP this year and compared to the percentage of the previous year, reflects the acceleration or slowdown of the economy, which represents the change in the level of production of goods and services during a given period, If the rate of growth increases or decreases or is still stable, its rise results in positive effects, including job creation, increasing national income, improving the standard of living of individuals, improving education, health and transport, and reducing poverty. Ranked first among countries with an economic growth rate of 7.4%.
  • The size of the country’s foreign exchange reserves: foreign currency deposits held by central banks, a measure of the national wealth of GDP. China currently ranks first among countries with the largest foreign exchange reserves of US $ 4 trillion
  • The value of the natural resources of the state and Russia is by this standard in the forefront of the $ 75.7 trillion of resources, primarily natural gas and timber