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 February 10th, 2019, 08:47 AM #1 Member   Joined: Mar 2017 From: Israel Posts: 85 Thanks: 2 Macro-economics Hello Can you help me please about the next exercise: The nominal GDP of the economy has increased by 16% in the last decade, the population has increased by 11%, and the price index has increased by 3%. What is the value of real GDP per capita? I just know that real GDP (not per capita) is 1.16/1.03, but it's my first (or second, I'm not sure) question about real GDP per capita and increasing of population, so I don't really know how to solve this. Thanks!
 February 10th, 2019, 09:31 AM #2 Senior Member   Joined: May 2016 From: USA Posts: 1,310 Thanks: 551 Hi Ilan The question is not well posed. (I know you probably translated it so that is not surprising, but it means I am not 100% sure that I can answer your question exactly.) Suppose the nominal gdp, real gdp, population, and real gdp per capita are each indexed at 100 as of a decade ago. Thus, if I understand the question, the index for nominal gdp now stands at 116 and the price index currently stands at 103. That implies that real gdp has an index of $\dfrac{116}{103} * 100 \approx 112.62$ The population index is currently 111. So the index of real gdp per capita is $\dfrac{100 * \dfrac{116}{103}}{111} * 100 \approx 101.46.$ Now that is plausible and can be checked mentally as follows. 116 relative to 100 is a 16% increase. 103 relative to 100 is a 3% increase. So real gdp increased about 13%. Population increased by 11%. So population per capita increased about 2%. Thanks from IlanSherer
February 10th, 2019, 10:19 AM   #3
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Joined: Mar 2017
From: Israel

Posts: 85
Thanks: 2

Quote:
 Originally Posted by JeffM1 Hi Ilan The question is not well posed. (I know you probably translated it so that is not surprising, but it means I am not 100% sure that I can answer your question exactly.) Suppose the nominal gdp, real gdp, population, and real gdp per capita are each indexed at 100 as of a decade ago. Thus, if I understand the question, the index for nominal gdp now stands at 116 and the price index currently stands at 103. That implies that real gdp has an index of $\dfrac{116}{103} * 100 \approx 112.62$ The population index is currently 111. So the index of real gdp per capita is $\dfrac{100 * \dfrac{116}{103}}{111} * 100 \approx 101.46.$ Now that is plausible and can be checked mentally as follows. 116 relative to 100 is a 16% increase. 103 relative to 100 is a 3% increase. So real gdp increased about 13%. Population increased by 11%. So population per capita increased about 2%.
I'm very sorry , there were some English words which I didn't know/remember. I would explain to you, but you already answered my question, so thanks a lot!

Last edited by skipjack; February 10th, 2019 at 10:23 AM.

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