Chapter 15, Problem 1P

To determine

To determine: The given years’ real GDP per capita as a percentage of its 1960 and 2011 levels.

Concept Introduction:

Gross Domestic Product (GDP): It refers to the gross money value or the gross market value of all finished goods and the services produced by resident and non-resident people of a country that is within the borders of that particular country in an accounting year.

Explanation of Solution

a. Calculation of real GDP.

Formula to calculate real GDP per capita:

GDP per capita of Argentina:

Year	Real GDP per Capita($)	Percentage of 1960 real GDP per Capita(%)	Percentage of 2011 real GDP per Capita(%)
1960	6,585	100	48
1970	8,147	124	59
1980	8,938	136	64
1990	6,889	105	50
2000	9,208	140	66
2011	13,882	211	100

GDP per capita of Ghana:

Year	Real GDP per Capita($)	Percentage of 1960 real GDP per Capita(%)	Percentage of 2011 real GDP per Capita(%)
1960	1,557	100	66
1970	1,674	107	71
1980	1,418	91	60
1990	1,296	83	55
2000	1,530	98	65
2011	2,349	150	100

GDP per capita of South Korea:

Year	Real GDP per Capita($)	Percentage of 1960 real GDP per Capita(%)	Percentage of 2011 real GDP per Capita(%)
1960	1,610	100	5
1970	2,607	162	8
1980	5,161	320	17
1990	11,376	706	38
2000	20,016	1243	67
2011	2,349	1840	100

GDP per capita of United States:

Year	Real GDP per Capita($)	Percentage of 1960 real GDP per Capita(%)	Percentage of 2011 real GDP per Capita(%)
1960	15,136	100	66
1970	20,115	133	48
1980	25,221	166	60
1990	31,431	207	74
2000	39,498	260	93
2011	42,244	278	100

Conclusion:

Thus, real GDP is calculated for every country.

b. Comparison of living standard.

• According to the data calculated in part a. it can be said that the highest rise in standard of living from 1960 to 2011 is of South Korea as its real GDP is 1840% in 2011..

• The growth path of Argentina was less consistent compared to Ghana therefore, it can be said that Argentina has moderate standard of living.

• The Real GDP of the U.S in 2011 has increased to 278%, so the U.S also has moderate standard of living.

Conclusion:

Thus, the highest rise in standard of living is in South Korea.