Question

Connect Problem CP 22-5 (algo) Suppose that real output for a small developing country in year 1 is $4.2 billion and that population is 4.6 million. Instructions: In parts a and b, round your answers to the nearest dollar a. What is per capita GDP? b. If real output in year 5 increases to $4.4 billion and population increases to 4.9 million, what is the new per capita GDP? c. Has the average standard of living for this small developing country undergone an increase or a decrease? (Click to select)

Answer 1

Answer 2

SOLUTION :

a.

Per capita GDP in year 1 of a small developing country

= Total output in year1 / Population in year1

= 4.2 billion dollars  / 4.6 million 

= 4200 million  dollars / 4.6 million

= 913 ($) (ANSWER).

b.

New per capita GDP in year 5 of that small developing country

= Total output in year 5 / Population in year 5

= 4.4 billion dollars  / 4.9 million 

= 4400 million  dollars / 4.9 million

= 898 ($) (ANSWER).

c.

As new GDP in year 5  has declined from that in year1, standard of living for this small 

country has undergone a decrease. (ANSWER).