Finding out a country’s GDP is insufficient to determine its financial situation. The sum of all the commodities and services a nation generates in a year is its gross domestic output. The United States, China, Japan, and Germany have the highest GDPs.
However, if GDP was the only metric used to determine wealth, little countries like Singapore and Luxembourg, and others would not exist. The distribution of wealth is not taken into account by GDP. Therefore, dividing the GDP by the country’s population, or per capita GDP, is a more appropriate way to evaluate.
However, there are issues specific to this measurement type. In comparison to the other country, one paycheck may buy far less there. Therefore, it’s crucial to assess how much a nation’s citizens can buy with their money.
The GDP must be modified to reflect the country’s purchasing power parity. It is preferable for nations to be both wealthy and egalitarian because economic disparity eventually has an adverse effect on all countries and slows growth.