Investment is critical to a nation’s prosperity. To further this discussion, one must understand how nations measure their economic value. A nation’s economic value is calculated by measuring all of its investments and expenditures on goods and services. This economic value is called Gross Domestic Product (GDP) and is calculated by adding total consumption, investment, government spending, changes in inventories, and net exports.
GDP is a good measure of a nation’s economic progress and national standard of living as it is adjusted for inflation. Inflation occurs when the cost of a specific good or service increases. This increase is either due to an increase in demand, given a limited supply of a product or an increase in the nation’s money supply. Excluding inflation in GDP comparisons allows a true comparison of economic progress. In this section, we break down healthcare expenditures from the global perspective to national.