ASSIGNMENT OF MACROECONOMICS

SUBMITTED TO:Ms Shweta Miglani SUBMITTED BY:Kamalpreet Kaur PGDM-A

PCTE GROUP OF INSTITUTES, LUDHIANA

Question
In the popular lore, the Olympics provide an opportunity for the finest athletes in the world to compete with each other head-to-head on the basis of raw talent and hard work. And yet, contenders from Laos tend to finish last or close to it in almost any event in which they compete. One Laotian athlete garnered the unenviable record of having been the slowest entrant in the nearly half-century long history of the 20-kilometer walk. In contrast, U.S. athletes won 103 medals at the 2004 Athens Olympics and 110 medals at the 2008 Beijing Olympics. Why do Laotians fare so poorly and Americans so well, with athletes from other countries falling in between? How do you thing GDP as an Economic Indicator is responsible for performance of Americans in Olympics. GDP promotes well being of any nation. Justify the statement with due reasoning.

Answers
Ans.1 Laos is a landlocked country with an inadequate infrastructure and a largely unskilled work force. The GDP of the country is approximately $14.447 billion on PPP basis and PCI is about $2266 only. The population of the country is more than 6 billion approximately. Laos became independent in 1949 but because of civil war it could not focus on its development till 1975. After that the country started progressing but given its less resources as compared to its demands from its people it has faced many challenges in development of its economy. On the other hand we are talking about USA, second name for world power whose GDP is approximately $15 trillion and its PCI is $47,000 approximately. These facts are given to show the position of the country. Normally the more GDP the country has, the more it will be able to spend on its people and their development. Since Laos has less GDP as compared to USA and their demands are comparatively as much as USA has (in %). There can be some other factors also like inclination of the people towards games or sports, infrastructure availability, etc. but these can be influenced by govt. actions. So GDP is one of the factors that can decide about the effectiveness of its people and the country at the national level because out of the GDP only the govt. spends on sports.

Ans. 2-

GDP is responsible for the performance of Americans in the various games or sports events up to some extent although indirectly. Because USA has more money with them and more money to spend on the infrastructure facilities and creating a sport or game loving culture.USA being a developed economy has disposable income that it can spend upon recreational activities. It can be understood by a simple circle. i.e. more GDP means people are producing more, In turn they have more income, govt. also has more moneypeople can spend on other activities beside basic needs and govt. also creates the infrastructure for developing interest in people to participate in sports.

Ans. 3 Yes GDP promotes well being of nay nation. It can be shown with the help of an example like India has seen a tremendous growth in past few years. This is evident from the GDP figures of the country also. See the growth in the infrastructure availability (Metros, airlines, etc.), the decrease in the mortality ratio, increase in the literacy rate, upgraded standards of living of the people, growth in service sector of Indian economy, more availability of opportunities, etc. These all are examples of how growth in GDP impacts the well being of the people.