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Calculating Real GDP per Capita
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If Country A has a nominal GDP of $1 trillion, a GDP deflator of 1.2, and a population of 50 million, what is its real GDP per capita?

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Choose the Best Answer

A

$20,833

B

$25,000

C

$30,000

D

$50,000

Understanding the Answer

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Answer

To find the real GDP per capita for Country A, we first need to calculate the real GDP. We do this by dividing the nominal GDP of $1 trillion by the GDP deflator of 1. 2. This gives us a real GDP of about $833. 33 billion.

Detailed Explanation

To find real GDP, divide the nominal GDP by the GDP deflator. Other options are incorrect because This answer might come from dividing the nominal GDP by the population only; This could be a guess based on rounding numbers.

Key Concepts

Real GDP per Capita
Nominal GDP
GDP Deflator
Topic

Calculating Real GDP per Capita

Difficulty

easy level question

Cognitive Level

understand

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