Macroeconomics, Student Value Edition (7th Edition)
Macroeconomics, Student Value Edition (7th Edition)
7th Edition
ISBN: 9780134739038
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
Question
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Chapter 10, Problem 10.1.1RQ
To determine

Increment in real GDP (Gross Domestic Product).

Expert Solution & Answer
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Explanation of Solution

In 1900, the real GDP per capita was about $6000; more than a century later in 2016, it had risen to about $50,010. It indicates that an average American in 2016 can purchase more than eight times the goods and services like an average American in the year 1900. This increase in real GDP per capita really understates the true increase in the standard of living of Americans 2016 compared to1900because several current goods and services were not available in the year 1900.

Economics Concept Introduction

Concept introduction:

Real GDP: Real GDP refers to the market value of all final goods and services produced in an economy during the accounting year, which is measured in constant prices.

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