Question

How is per capita GDP calculated, and what does it tell us about the economy? Explain?

Answer 1

Answer) Per capita GDP is calculated by dividing gross domestic product by population of the country,that is Per capita GDP is

Per capita GDP=GDP/Total population of the country

Per capita GDP tells us about how much purchasing power each citizen of a country on an average has,it tells us how good the economy is,it tells us the standard of living of citizens,higher per capita GDP tells us that on an average a citizen has more,it also gives us the indication that how much output on an average a consumer is producing,higher per capita GDP tells us more productivity.Per capita GDP balances the larger and smaller countries that is for example if  a country 's rank in GDP is good but its per capita GDP is not at the same rank,it means its economy is not growing at the level it can and should grow.

Combining above two points we get that per capita GDP is a good indicator of how well an economy is doing.

Answer is complete.Thank you!