Question

part 1

questions 1-3

Part 1 - Check Your Understanding- Answer the following questions using the chart depicting room Gross Domestic Product (GDP) data for Canada, China and Chile. Canada China GDP growth rate 2015 0.9% 6.9% 2.3% 2016 1.5% 6.7% 1.6% 2017 3.0% 6.8% 1.4% GDP per capita (PPP) 2015 $47,100 $14,800 $24.400 2016 $47,200 $15,700 $24,500 $16.600 $24.600 rGDP 2015 $1.687 trillion R7 trillion $20.3 trillion $20 3 trillion $439 billion 2016 $1.712 trillion $21.66 trillion $446 billion 2017 $1.764 trillion $23.12 trillion $452 billion Source: CIA Factbook 1. Based on this data alone, which of these three countries is most likely to experience a recession in 2018. Support your conclusion with data from the table. 2. Rank these countries in terms of their standards of living. Support your conclusion with data from the table. 3. The GDP in the US in 2017 was $19.36 trillion, the GDP per capita was $59,500, and GDP growth rate was 2.2%. Given this information, is it likely that the US will have a higher real GDP than China in 2018? Support your conclusion with data from the table.

Answer 1

1. Chile is most likely to face recession in 2018 since it is witnessing a downward trend in its real GDP growth rate. Recession refers to a decline in value of the economy. Thus when the economic indicators decline so does GDP.

2. The standard of living is usually ascertained by comparing the values of real GDP per capita of nations over time. Real GDP per capita is a measurement of the total economic output of a country divided by the number of people and adjusted for inflation. Although the real GDP per capita shows an upward trend in all nations, we get the following ranking by comparing absolute values: The standard of living is highest in Canada followed by Chile while it is least in China.

3. No, it is unlikely that US will have a higher real GDP than China in 2018. This is so because China triumphs over US in both aspects- absolute value of real GDP as well as growth rate of real GDP. Thus with respect to the given statistics China is likely to maintain its lead.