Did Movie Tickets Cost the Same 5 years ago???

Must Take Into Account Inflation: Even when measuring GDP or GNP, it is not good enough to add up the numbers through the Expenditure Approach or the Flow of Income Approach. You have to take into account the inflation rate!!!

Nominal GDP – Inflation Rate = Real GDP Nominal GDP does not take into account the increase in prices due to inflation Real GDP takes into account the inflation for that year Vs.

Practice Problems: What is nominal GDP when Real GDP is 2% and Inflation Rate is 3%? What is the inflation rate when nominal GDP is 6% and Real GDP was 4%? What is Real GDP when nominal GDP is 7% and Inflation Rate is 5%?

Per Capita GDP (per person GDP) Per Capita GDP measures the average income earned by a citizen of a country. GDP per capita is often used as an indicator of standard of living in an economy. A higher per capita GDP indicates a higher standard of living and vice versa.

How to Calculate Per Capita GDP: Per capita = Real GDP Population

Example Problem: Real GDP = 5 Trillion Population = 250 Million Calculate per capita GDP!!!

Try some on your own. Calculate the Per Capita GDP for the following problems: Real GDP=6 trillion and Total Population=120 million Real GDP=4 trillion and Total Population=200 million

MYSTERY NATIONS: JUST THE FACTS You will be given a description of 5 countries based on its: Size Population Natural Resources In your spiral notebook, examine each description carefully and make an educated guess in which country you think it is describing. Write it inside your spiral notebook.

Country “A” ARGENTINA $12,200 PER CAPITA GDP Size: slightly less than three-tenths the size of the U.S. Population: about 39.54 million-small for a nation of this size Natural Resources: rich with fertile plains, lead, zinc, tin, copper, iron ore, manganese, oil and uraniun ARGENTINA $12,200 PER CAPITA GDP

Country “B” JAPAN $29,400 PER CAPITA GDP Size: slightly smaller than California Population: large population of more than 127.4 million people Natural Resources: almost no mineral resources; some fish JAPAN $29,400 PER CAPITA GDP

Country “C” NIGERIA $1,000 PER CAPITA GDP Size: slightly more than twice the size of California Population: large population of 128.77 million Natural Resources: vast resources including oil, tin, iron, ore, coal, limestone, lead, zinc, and natural gas NIGERIA $1,000 PER CAPITA GDP

Country “D” SINGAPORE $27,800 PER CAPITA GDP Size: slightly more than 3.5 times the size of Washington D.C. Population: slightly larger than 4.4 million-large for such a small nation Natural Resources: fish, deepwater ports SINGAPORE $27,800 PER CAPITA GDP

Country “E” RUSSIA $9,800 PER CAPITA GDP Size: slightly less than 1.8 times the size of the U.S. Population: 143.4 million Natural Resources: vast base including major deposits of oil, natural gas, coal, many strategic minerals and timber RUSSIA $9,800 PER CAPITA GDP

Per Capita GDP for the U.S. (2005: CIA World Fact Book) Population = 295.7 million A higher per capital GDP indicates a higher standard of living.

Top 10 Countries Rank Country Per Capita GDP 1. Luxembourg $69,800 2. Norway $42,300 3. U.S. $41,300 4. Ireland $40,610 5. Iceland $35,115 6. Denmark $34,740 7. Canada $34,273 8. Hong Kong $33,479 9. Austria $33,432 10. Switzerland $32,571