Increment in real GDP (Gross Domestic Product ).
Explanation of Solution
In 1900, the real GDP per capita was about $6000; more than a century later in 2014, it had risen to about $50,010. It indicates that an average American in 2014 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 2014 compared to1900because several current goods and services were not available in the year 1900.
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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Chapter 21 Solutions
Economics, Student Value Edition Plus MyLab Economics with Pearson eText - Access Card Package (6th Edition)
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