The GDP in Japan is $4.87 trillion. The rate of inflation is 2.5%. If the population of Japan is 127,502,000, find the per capita GDP in this country.
Real GDP = GDP - (GDP \* Inflation Rate)
Per Capita GDP = \frac{\text { Real GDP }}{\text { Population }}
Per Capita GDP = $[?]$
Round to the nearest cent.
Answer (1)
Calculate the Real GDP: Real GDP = GDP - (GDP × Inflation Rate) = $4.87 × 1 0 12 − ( $4.87 × 1 0 12 × 0.025 ) = $4.74825 × 1 0 12 .
Calculate the Per Capita GDP: Per Capita GDP = Population Real GDP = 127 , 502 , 000 $4.74825 × 1 0 12 = $37240.59230443444 .
Round the Per Capita GDP to the nearest cent: $37240.59 .
The per capita GDP in Japan is $37240.59 .
Explanation
Calculate Real GDP First, we need to calculate the Real GDP. The formula for Real GDP is given as:
Real GDP = GDP - (GDP × Inflation Rate)
We are given that the GDP is $4.87 trillion and the inflation rate is 2.5% . So, we have:
Real GDP = $4.87 × 1 0 12 − ( $4.87 × 1 0 12 × 0.025 )
Real GDP Value Now, we calculate the value of Real GDP:
Real GDP = $4.87 × 1 0 12 − ( $4.87 × 1 0 12 × 0.025 ) = $4.87 × 1 0 12 − $0.12175 × 1 0 12 = $4.74825 × 1 0 12
Calculate Per Capita GDP Next, we need to calculate the Per Capita GDP. The formula for Per Capita GDP is given as:
Per Capita GDP = Population Real GDP
We are given that the population of Japan is 127,502,000. So, we have:
Per Capita GDP = 127 , 502 , 000 $4.74825 × 1 0 12
Per Capita GDP Value Now, we calculate the value of Per Capita GDP:
Per Capita GDP = 127 , 502 , 000 $4.74825 × 1 0 12 = $37240.59230443444
We need to round this to the nearest cent, which is the nearest hundredth.
Rounding to Nearest Cent Rounding $37240.59230443444 to the nearest cent, we get $37240.59 .
Final Answer Therefore, the per capita GDP in Japan is $37240.59 .
Examples
Understanding per capita GDP is crucial in economics and finance. For instance, if you're considering investing in Japan, knowing the per capita GDP helps you assess the average economic output per person. This gives insights into the standard of living and economic productivity, which are key indicators for investment decisions. It also helps in comparing Japan's economic performance with other countries, providing a basis for strategic financial planning and resource allocation.
