Final answer:
Several factors contribute to why some countries have higher GDPs than others, such as property rights, economic system, capital, human capital, and natural resources. Productivity and a legal system that supports business transactions are significant to economic growth. Government investments in education, infrastructure, and innovation also play a crucial role.
Step-by-step explanation:
Content loaded with discussions about why some countries have higher GDPs than others often focuses on several key factors. These include the economic systems in place, the enforcement of property rights, the accumulation and productive use of capital, the skill levels of the workforce or human capital, and the availability and exploitation of natural resources.
Strong property rights allow individuals and firms to use their property to the highest and best use, which includes trading or selling it. A reliable legal system that enforces contracts promotes business transactions and, consequently, economic growth. Productivity, which is measured as GDP per worker, is crucial to this growth. For instance, countries with higher productivity will see their GDP increase more rapidly than countries with lower productivity.
Over time, small differences in economic growth rates can translate into substantial differences in GDP per capita. This outcome is evident through the compounded effects of growth over years, as demonstrated by projected incomes of the United States and South Korea in the example provided. Furthermore, governments that invest in human capital, infrastructure, technological innovation, and favorable investment climates contribute positively to their nation's economic growth.