Suppose that a certain country has an MPC of 0.8 and a real GDP of $400 billion. If its investment spending decreases by $5 bill
1 answer:
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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=
<u>Country A</u>
⇒ Per capita GDP=
We know one billion= 1000 million.
⇒ Per capita GDP=
∴ Per capita GDP=
<u>Country B</u>
⇒ Per capita GDP=
∴ Per capita GDP=
Hence, comparing both Per capita GDP of country A and B will get Country A have higher per capita GDP.