Juanita,

While per capita GDP does not directly measure well-being, it can be used as a proxy for direct measures. For example, the wealthiest countries have per capita incomes over 10 times higher than the poorest.

For example, literacy rates indicate the most basic level of education. In wealthy countries, literacy rates of 99% are common. In the poorest countries, literacy rates range from 35-65%. Also, using daily calorie supply per person directly measures the overall amount of food available. In wealthy countries, 3000 calories (or higher) is a typical figure. Many of poorest countries have only 2000 calories available. The World Health Organization estimates that 2600 calories per day are needed for basic nutrition.

Now, the GDP measurement of economic production has a few major flaws. One of them is the failure to account for activities of value in the underground economy. What is this underground economy and what are some reasons why many developing countries have large underground economies? What is the size of the underground economy in Canada and its main characteristics?