Question

Suppose Country A and Country B each have the same real Gross Domestic Product (GDP), equal to $440 billion. Country A has 100 million people and Country B has 175 million people. In this situation, per capita real Gross Domestic Product (GDP) is:_____________.1. higher in Country A.2. an irrelevant factor.3. higher in Country B.4. the same in both countries

Answer 1

Answer:

1. higher in Country A

Explanation:

Given: Gross domestic product (GDP)= $440 billion.

           Country A has 100 million people.

           Country B has 175 million people.

Real Gross Domestic Product (GDP): It is defined as the entire output produced annually that includes factors such as inflation and is adjusted for price changes.

Per capita real Gross Domestic Product (GDP): It gives the annual salary for the country and shows the quality of living.

Now calculating per capita real Gross Domestic Product (GDP) for both the countries.

Formula; Per capita GDP= $\frac{GDP}{Population}$

Country A

⇒ Per capita GDP= $\frac{440\ billion}{100\ million}$

We know one billion= 1000 million.

⇒ Per capita GDP= $\frac{440\times 1000}{100}$

∴ Per capita GDP= $\ 4400\ million$

Country B

⇒ Per capita GDP= $\frac{440\times 1000}{175}$

∴ Per capita GDP= $\ 2514.28 \ million$

Hence, comparing both Per capita GDP of country A and B will get Country A have higher per capita GDP.