Answered: The following table reports real GDP…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter15: Measuring A Nation's Income

Section: Chapter Questions

Problem 7PA

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The following table reports real GDP per person for several different economies in the years 1960 and 2010. It also gives each economy's average annual growth rate during this period. For example, real GDP per person in the Central African Republic was $1,010 in 1960, and it actually declined to $628 by 2010. The Central African Republic's average annual growth rate during this period was -0.95%, and it was the poorest economy in the table in the year 2010.

The real GDP-per-person figures are denominated in U.S. dollars with a base year of 2005. The following exercises will help you to understand the different growth experiences of these economies.

1. Economic growth around the world
The following table reports real GDP per person for several different economies in the years 1960 and 2010. It also gives each economy's average
annual growth rate during this period. For example, real GDP per person in the Central African Republic was $1,010 in 1960, and it actually
declined to $628 by 2010. The Central African Republic's average annual growth rate during this period was -0.95%, and it was the poorest economy
in the table in the year 2010.
The real GDP-per-person figures are denominated in U.S. dollars with a base year of 2005. The following exercises will help you to understand the
different growth experiences of these economies.
Real GDP per Person in 1960
Real GDP per Person in 2010 Annual Growth Rate
Economy
(Dollars)
(Dollars)
(Percent)
Australia
13,817
37,338
2.01
Finland
8,837
31,601
2.58
Thailand
772
8,467
4.91
Ireland
7,807
41,558
3.40
Pakistan
717
2,477
2.51
Central African Republic
1,010
628
-0.95
Indicate which economy satisfies each of the following statements.
Central African
Republic
Statement
Australia
Finland
Ireland
Pakistan
Thailand
This economy experienced the fastest rate of growth in real
GDP per person from 1960 to 2010.
This economy had the highest level of real GDP per person in
the year 2010.
Consider the following list of four countries. Which economy began with a level of real GDP per person in 1960 that was below that of Finland and grew
fast enough to catch up with and surpass Finland's real GDP per person by 2010?
Australia
O Central African Republic
O Ireland
Pakistan

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

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