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    Per Capita Real GDP

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    Part I
    Consider the following data.

    Country Population Real GDP
    ($ billions)
    A 10 55
    B 20 60
    C 5 70

    What is the per capita real GDP in each of these countries?

    Part II
    Now consider the following hypothetical situation:
    Per capita real GDP in country L is three times as high as in country M. The economic growth rate in country M is 8 percent while country L's economy grows at a rate of 5 percent.

    Use table below to determine approximately how many years will it be before per capita GDP in country M surpasses per capita real GDP in country L.

    Interest Rate
    Number
    of Years 3% 4% 5% 6% 8% 10% 20%
    1 1.03 1.04 1.05 1.06 1.08 1.10 1.20
    2 1.06 1.08 1.10 1.12 1.17 1.21 1.44
    3 1.09 1.12 1.16 1.19 1.26 1.33 1.73
    4 1.13 1.17 1.22 1.26 1.36 1.46 2.07
    5 1.16 1.22 1.28 1.34 1.47 1.61 2.49
    6 1.19 1.27 1.34 1.41 1.59 1.77 2.99
    7 1.23 1.32 1.41 1.50 1.71 1.94 3.58
    8 1.27 1.37 1.48 1.59 1.85 2.14 4.30
    9 1.30 1.42 1.55 1.68 2.00 2.35 5.16
    10 1.34 1.48 1.63 1.79 2.16 2.59 6.19
    20 1.81 2.19 2.65 3.20 4.66 6.72 38.30
    30 2.43 3.24 4.32 5.74 10.00 17.40 237.00
    40 3.26 4.80 7.04 10.30 21.70 45.30 1470.00
    50 4.38 7.11 11.50 18.40 46.90 117.00 9100.00

    © BrainMass Inc. brainmass.com March 4, 2021, 8:20 pm ad1c9bdddf
    https://brainmass.com/economics/economic-growth/per-capita-real-gdp-161652

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    Solution Preview

    Part I) recall that GDP per capita is just GDP divided by population. so for each country you would have the following...

    country A) 55/10 =5.5
    country B) 60/20=3
    country C) 70/5=14

    Part II) L=3*M, where growth rate of L = 5% and M = ...

    Solution Summary

    GDP per capita is determined.

    $2.49

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