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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

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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. Tags macroeconomics Thread Tools Show Printable Version Email this Page Display Modes Linear Mode Switch to Hybrid Mode Switch to Threaded Mode Similar Threads Thread Thread Starter Forum Replies Last Post IlanSherer Economics 1 January 27th, 2019 08:46 AM IlanSherer Economics 3 January 25th, 2019 08:56 AM IlanSherer Economics 2 May 8th, 2018 07:19 AM IlanSherer Economics 7 May 6th, 2018 11:03 AM IlanSherer Economics 5 May 5th, 2018 08:03 AM

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