1. Describe the main criteria used to classify economies.

According to the reading, the main criteria used for the classification are:

Gross Domestic Product: Gross domestic product (GDP) is the value of all goods and services produced
by a country in a single year. Usually quoted in US dollars.

Purchasing Power Parity PPP : To compare production and income across countries, we need to look at
more than just GDP, (PPP) is, in essence, an economic theory that adjusts the exchange rate between
countries to ensure that a good is purchased for the same price in the same currency

Human Development Index (HDI): which measures people’s satisfaction in three key areas—long and
healthy life in terms of life expectancy; access to quality education equally; and a decent, livable
standard of living in the form of income. The HDI and the other composite indices can only offer a broad
proxy on some of the key the issues of human development, gender disparity, and human poverty.

we can also find the following:

HPI that is divided into 2 HPI-1 that is to measure developed countries and HPI-2 that is to measure
high-income countries that belong to the OECD and includes prolonged unemployment rates.

HDI that measures satisfaction in three measures, long and healthy life, equitable access to quality
education and decent life measured in income

2. Select two countries on Figure 4.1 identifying GDP per person and research the local economy.
Are your findings consistent with what you would expect based on the country rankings? What is the
human development ranking for each country? In your opinion, are these rankings consistent with the
GDP

COUNTRY GPD 2019 GDP PER CAPITAL HDI

URUGUAY USD 59.6 Billion 23.581 USD 52

BRAZIL USD 1839,8 Billion 14651.60 USD 73

In my opinion it is not consistent since Brazil has higher income per person, however if we validate the
population number we can see that this varies according to its population number, we can also see
within the country in its previous behaviors.

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