In May 2013, the value of the Consumer Price Index (CPI) in a certain country, Polonia,...
In May 2013, the value of the Consumer Price Index (CPI) in a certain country, Polonia, reached an all-time high of 228 index points and per capita nominal GDP was $48 comma 500. In January 1950, the CPI was at its lowest at 46 index points. Per capita nominal GDP in 1950 was $8 comma 000. Calculate real GDP per capita for 1950 by converting that year's nominal GDP per capita into current (2013) dollars. For 1950, real GDP per capita (in 2013 dollars) was
Homework Answers
Nominal GDP per capita in 1950 = $8,000
CPI in 1950 = 46
CPI in 2013 = 228
Calculate the real GDP per capita in 1950 -
Real GDP per capita in 1950 = Nominal GDP per capita * [CPI in 2013/CPI in 1950]
Real GDP per capita in 1950 = $8,000 * [228/46]
Real GDP per capita in 1950 = $39,652.17
The real GDP per capita in 1950 (in 2013 dollars) was $39,652.17
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