Macroeconomics
Macroeconomics
21st Edition
ISBN: 9781259915673
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
Question
Chapter 22, Problem 1DQ
To determine

The Categorization of countries by World Bank.

Expert Solution & Answer
Check Mark

Explanation of Solution

The World Bank is the International Financial Institution which provides loans for all the countries in order to bridge their capital needs with the investment and programs. All the countries of the world are categorized into four categories or groups by the World Bank on the basis of the GNI per capita of the country. They are the following:

Low-income Economies: It is the group of countries whose GNI per capita is less than $1,005. The examples for the low-income economies are Senegal and Liberia.

Lower middle- income Economies: It is the group of countries which has the GNI per capita income between $1,006 and $3,955. The examples for the Lower-middle income group of economies are India and Indonesia.

Upper middle- income Economies: It is the group of countries which has the GNI per capita income between the $3,956 and $12,235. The examples for the upper middle- income group economies are the Croatia and Samoa.

High- income Economies: They are the countries that have their GNI per capita income $12,235 or more. The best examples for the High –income economies are Germany and Czech Republic.

Economics Concept Introduction

Concept introduction:

World Bank: It is the International Bank that provides long term loans for the World countries for their capital needs and programs.

Gross national Income (GNI): It is the total national income of the country which includes domestically earned income as well as the income earned by the residents outside the countries. It can be calculated by adding the Gross domestic product with the net factor income from abroad.

GNI per capita: It is the Gross National Income divided by the total population of the country. Thus it is the GNI per head.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
What are spillover effects and how do they affect growth? (LO27-4)
Assume that a very tiny and very poor DVC has income per capita of $300 and total national income of $3 million. How large is its population? If its population grows by 2 percent in some year while its total income grows by 3 percent, what will be its new income per capita rounded to full dollars? If the population had not grown during the year, what would have been its income per capita?
Suppose that 10 workers were required in 2010 to produce 40,000 bushels of wheat on a 1,000-acre farm. a. What is the average output per acre? Per worker? b. If in 2020 only 8 workers produce 44,000 bushels of wheat on that same 1,000-acre farm, what will be the average output per acre? Per worker? c. By what percentage does productivity (output per worker) increase over those 10 years? Over those 10 years, what is the average annual percentage increase in productivity?
Knowledge Booster
Similar questions
  • 1. California's GDP per capita is $60,000, while Nevada's GDP per capita is$40,000. If both grow at 2 percent per year, how long will it take for the twostates to have the same GDP per capita?A) 25 yearsB) 35 yearsC) 50 yearsD) They will never have the same GDP per capita
    (Words apart) Per capita income most recently was about 160 times greater in the US that in Democratic Republic of the Congo. Suppose per capita income grows an average of 3 percent per year in the richer country and 6 percent per year in the poorer country. Assuming such growth rates continue indefinitely into the future, how many years would it take before per capita income in the Congo exceeds that of the US? (to simplify the math, suppose at the outset per capita income is $160000 in the richer country and $1000 in the poorer country.)
    4. Discuss whether state or market solutions to development problems are preferable by evaluating whether these statements are true or false. Use production function specifications (such as a Solow model with two types of capital) and graphs to prove your points. Give examples in African countries of good and bad policies and outcomes to illustrate your arguments in a through d.a. Markets get the desirable allocation right when all inputs to production are private goods and there is perfect competition.b. It is desirable that the government allow Free Trade rather than kill trade off with punitive taxes and controls.c. State intervention is needed when some inputs to production are public goods (give the definitions explaining how public goods differ from private goods).d. Whether market solutions are preferable to state intervention in a particular case depends on whether private payoffs and social payoffs are aligned.
    • SEE MORE QUESTIONS
    Recommended textbooks for you
  • ECON MICRO
    Economics
    ISBN:9781337000536
    Author:William A. McEachern
    Publisher:Cengage Learning
    ECON MACRO
    Economics
    ISBN:9781337000529
    Author:William A. McEachern
    Publisher:Cengage Learning
  • ECON MICRO
    Economics
    ISBN:9781337000536
    Author:William A. McEachern
    Publisher:Cengage Learning
    ECON MACRO
    Economics
    ISBN:9781337000529
    Author:William A. McEachern
    Publisher:Cengage Learning