ECON2105_Ch7
CHAPTER 7:
PRODUCTION AND GROWTH
Let’s begin with some definitions:
1. Per Capita Income
2. Per Capita GDP
3. Growth Rate of GDP
where we multiply the expression in brackets by _______ to express the growth
rate as a percentage
Examples
1. Real GDP in Macroland in 2000 was $100,000.
Its population was 100.
Calculate its
per capita real GDP.
2. In the year 2001, per capita real GDP in Macroland was $1,050.
Use this information
and your calculation from the first example to calculate the growth rate of real GDP.
Per capita income and per capita real GDP give an estimate of the standard of living or
the material wellbeing of a “typical citizen” in a country.
The growth rate in the above variables is an estimate of the progress that an economy is
making.
Data suggest that
1.
Living standards _________________________________________________
2.
due to different growth rates, rankings of nations by per capita income (or per capita
real GDP) change over time.
(a)
Late 1800s  _____________________________________ was the richest nation
(b)
Today  ________________________________ all have higher per capita real GDP
(c) ________________________ probably had the fastest growth rate since 1890.
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 Spring '10
 Smith
 Economics, per capita, Capital accumulation, capita real GDP

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