The GDP in Canada is $1.65 trillion. The rate of inflation is 2.5%. If the population of Canada is 36,732,000, find the per capita GDP in this country.
[tex]
\begin{array}{c}
\text { Real GDP }=GDP-(GDP \text { . Inflation Rate }) \\
\text { Per Capita } GDP=\frac{\text { Real GDP }}{\text { Population }} \\
\text { Per Capita GDP }=\$[?]
\end{array}
[/tex]
Round to the nearest cent.
Answer (2)
The per capita GDP in Canada is calculated to be approximately $43,796.96 by first determining the Real GDP and then dividing it by the population. This value is important for analyzing the economic well-being of individuals in Canada. Overall, such calculations help in understanding a nation's financial status.
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Calculate the Real GDP: R e a l G D P = G D P − ( G D P × I n f l a t i o n R a t e ) = 1.65 × 1 0 12 − ( 1.65 × 1 0 12 × 0.025 ) = $1 , 608 , 750 , 000 , 000 .
Calculate the Per Capita GDP: P er C a p i t a G D P = P o p u l a t i o n R e a l G D P = 36732000 1.60875 × 1 0 12 = 43796.96177719699 .
Round the Per Capita GDP to the nearest cent: $43796.96 .
The per capita GDP in Canada is 43796.96 .
Explanation
Understanding the Problem We are given the GDP of Canada, the inflation rate, and the population. We need to find the per capita GDP. The formulas for Real GDP and Per Capita GDP are also provided.
Calculating Real GDP First, we calculate the Real GDP using the formula: R e a l G D P = G D P − ( G D P × I n f l a t i o n R a t e ) We have G D P = $1.65 × 1 0 12 and I n f l a t i o n R a t e = 2.5% = 0.025 . Therefore, R e a l G D P = 1.65 × 1 0 12 − ( 1.65 × 1 0 12 × 0.025 ) = 1.65 × 1 0 12 − 4.125 × 1 0 10 = 1.60875 × 1 0 12 So, the Real GDP is $1 , 608 , 750 , 000 , 000 .
Calculating Per Capita GDP Next, we calculate the Per Capita GDP using the formula: P er C a p i t a G D P = P o p u l a t i o n R e a l G D P We have R e a l G D P = $1.60875 × 1 0 12 and P o p u l a t i o n = 36 , 732 , 000 = 3.6732 × 1 0 7 . Therefore, P er C a p i t a G D P = 3.6732 × 1 0 7 1.60875 × 1 0 12 = 43796.96177719699 Rounding to the nearest cent, we get $43796.96 .
Final Answer Therefore, the per capita GDP in Canada is $43 , 796.96 .
Examples
Understanding per capita GDP is crucial for assessing a country's economic well-being. For instance, if you're comparing the average income of individuals in different countries or evaluating the standard of living, per capita GDP provides a valuable benchmark. It helps in making informed decisions about investment, policy-making, and understanding economic disparities. For example, knowing that Canada's per capita GDP is approximately $43 , 796.96 allows economists and policymakers to gauge the economic output per person and make comparisons with other nations.
