Let’s look at GDP and foreign exchange in Iceland. We can extract the following data from the World Bank, which maintains a database of economic data for all countries:
Fill in the blanks in the table using the formulas from the assigned reading (a bit of algebra is required):
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
|
Nominal GDP ($ billions) |
1627.11 |
1708.31 |
1787.68 |
1899.68 |
2020.55 |
||
GDP deflator |
100.00 |
102.97 |
106.35 |
119.57 |
122.10 |
||
Real GDP ($ billions) |
1753.35 |
1791.93 |
1869.19 |
2009.03 |
|||
Population (total) |
318041 |
319014 |
320716 |
323764 |
327386 |
330815 |
335439 |
Official exchange rate (Krona per US$) |
122.24 |
115.95 |
125.08 |
122.18 |
116.77 |
131.92 |
120.81 |
Answer these questions:
What was real GDP per capita in 2015? ___________________.
What was real GDP per capita in 2016? ___________________.
Using your answers above, compute the real GDP per capita growth rate for 2016: ___________.
In 2012, your instructor went to Iceland for an academic conference. The Icelandic currency is called the Krona. While there, he spent:
62,540 krona on hotel
10,630 krona on food
15,635 krona on souvenirs
How much did he spend in US dollars? __________________.
(a)
Real GDP in 2015 = $1,869.19 billion
Population in 2015 = 330815
Calculate the real GDP per capita in 2015 -
Real GDP per capita in 2015 = Real GDP in 2015/Population in 2015
Real GDP per capita in 2015 = $1,869.19 billion/330815 = $5,650,257.69
The real GDP per capita in 2015 is $5,650,257.69
(b)
Real GDP in 2016 = $2,009.03 billion
Population in 2016 = 335439
Calculate the real GDP per capita in 2016 -
Real GDP per capita in 2016 = Real GDP in 2016/Population in 2016
Real GDP per capita in 2016 = $2,009.03 billion/335439 = $5,989,255.87
The real GDP per capita in 2016 is $5,989,255.87
(c)
Calculate the real GDP per capita growth rate for 2016 -
Growth rate = [(Real GDP per capita in 2016 - Real GDP per capita in 2015)/Real GDP per capita in 2015] * 100
Growth rate = [($5,989,255.87 - $5,650,257.69)/$5,650,257.69] * 100 = 5.99% or 6%
The real GDP per capita growth rate for 2016 is 5.99 or 6 percent.
(d)
Total spending (in krona) = 62,540 + 10,630 + 15,635 = 88,805 krona
In 2012,
Exchange rate = 125.08 krona per dollar
Total spending (in dollars) = 88,805/125.08 = $709.98
The amount spent in US dollars is $709.98.
Let’s look at GDP and foreign exchange in Iceland. We can extract the following data from...
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