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Purdue AGEC 21700 - GDP Comparison
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Lecture 13Outline of Last Lecture I. Nominal GDPA. Real GDPB. GDP DeflatorII. GDP ExampleIII. Economic Growth RatesA. Recession B. Depression Outline of Current Lecture I. GDP ComparisonsA. Definition of Exchange RateB. Example ProblemII. GDP per CapitaA. Country ComparisonCurrent LectureIf you look at the real GDP of a country it is, in general, rising over time. This is due to the general increase in human consumption over time. It can be difficult to compare GDP’s across different countries. First thing to account for is the exchange rate. The exchange rate is the value of one currency in terms of a different currency. This can be accounted for through the market exchange rate, which is a more day-to-day exchange value. This can also be determined through purchasing power parity. This looks at the exchange in the long run, through comparison of two of the exact same goods. An example would be by using fast-food restaurant items. Below is an example problem to determine the exchange rate of another country and that country’s GDP.Egypt’s GDP in Egyptian pounds is 1,542 Billion pounds. Pounds per US dollar= 2.856Therefore, Egypt’s GDP in US dollars is equal to 1542/2.856= $540 BillionGDP per capita refers to the GDP per person of a country. This is found by taking a country’s GDP divided by that country’s population. This doesn’t tell us anything about a country’s distribution of wealth. Below is a table that shows a comparison of various contries. AGEC 217 1nd EditionGDP (Billions of $) Population (million) GDP per capita ($)China 12,406 1354 9162Germany 3197 82 39028South Korea 1759 115 15312USA 16245 314


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Purdue AGEC 21700 - GDP Comparison

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