How does the HDI differ from GDP per capita?

• A. HDI is primarily a monetary measure; GDP per capita is a health indicator.
• B. HDI includes life expectancy, education, and standard of living; GDP per capita measures economic output per person.
• C. HDI and GDP per capita measure the exact same thing.
• D. HDI focuses on natural resources only.

Answer: (B)

HDI measures development across multiple areas, not just money. It combines health, education, and living standards to give a broader picture of how people are actually doing. Health is shown by life expectancy, education by years of schooling (both for the current generation and potential attendance for the future), and living standards by income levels (often captured as GNI per person). GDP per capita, on the other hand, is simply economic output per person—total value of goods and services produced divided by population. It tells you how large the economy is relative to people, but it doesn’t directly reflect health, education, or well-being. That’s whyHDI’s inclusion of life expectancy and education, in addition to a standard of living measure, makes it the better descriptor of development.