Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Adjust nominal GDP for inflation using GDP deflator → Divide by population → Analyze results
B
Divide nominal GDP by population → Adjust for inflation using GDP deflator → Analyze results
C
Adjust for inflation → Analyze results → Divide GDP by population
D
Calculate nominal GDP → Divide by population → Adjust for inflation using GDP deflator
Understanding the Answer
Let's break down why this is correct
Answer
To calculate Real GDP per Capita, you first need to find the Real GDP of a country, which is the total value of all goods and services produced, adjusted for inflation. Next, you determine the population of that country, as Real GDP per Capita is meant to show the average economic output per person. After you have both numbers, you divide the Real GDP by the population. For example, if a country has a Real GDP of $1 trillion and a population of 50 million, you would divide $1 trillion by 50 million, resulting in a Real GDP per Capita of $20,000. This number helps us understand how much economic output is available for each person in the country.
Detailed Explanation
First, we adjust the nominal GDP for inflation. Other options are incorrect because This option suggests dividing nominal GDP by the population first; This option skips the important step of dividing by population after adjusting for inflation.
Key Concepts
Calculating Real GDP per Capita
Nominal vs. Real GDP
Inflation
Topic
Calculating Real GDP per Capita
Difficulty
easy level question
Cognitive Level
understand
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