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GNP per Capita
Complete these exercises with information from the Data Tables.

Explore the Data Exercises with Answers

1. Read the definition of purchasing power parity (PPP), then compare the GNP per capita and the PPP columns in the Economic Data Tables. In which countries is the GNP per capita higher than the GNP per capita adjusted for PPP? [Hong Kong, Japan, Singapore, Austria, Belgium, Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden, Switzerland, and United Kingdom.] In which income group are these countries? [High-income] What does this tell you about the cost of goods and services in these countries? [Goods and services tend to be more costly in these countries than in others. People here may have high per capita incomes, but they are not able to buy as much with each dollar.]

2. Make a copy of the blank Comparative Data Table and label the first column Countries, the second column GNP per capita, 1998, the third Population growth rate, 1980-98, the fourth Life expectancy at birth, 1998, and the fifth Access to safe water, 1990-96. Then, using the Text and the Basic Data Tables, fill in the chart according to the instructions below.

  1. Choose a low-income country in Sub-Saharan Africa and one in Asia (South and East) and the Pacific and write their names in the first column.
  2. Choose a middle-income country in Europe and Central Asia, one in Middle East and North Africa, and one in South America, and add them to the first column.
  3. Choose a high-income country in North and Central America and the Caribbean, one in Europe and Central Asia, and one in Asia (South and East) and the Pacific and add them to the first column.
  4. Label each country in your data table with an L, M, or H to show which income group it belongs to: low, middle, or high.
  5. Read the definitions of GNP per capita, population growth rate, access to safe water, and access to sanitation. Go to the Data Tables, and for each of your countries, find the 1998 GNP per capita, 1980-98 population growth rate, 1990-96 percentage of population with access to safe water and 1990-96 percentage of population with access to sanitation, and write this information in the appropriate columns. If data for one of the indicators are not available, select another country from the same income group and region.
  6. Rank the countries, with "1" equaling the highest GNP per capita and "8" equaling the lowest. Write the appropriate ranking number in parentheses after the data in column 2.
  7. Study your chart and answer the following questions:
    • In the countries with the lowest GNP per capita, are the other indicators high or low?
    • In the middle-income countries, are the other indicators higher or lower than in the low-income countries?
    • In the high-income countries, are the other indicators higher or lower than in the developing countries?
  8. Based on your chart, is GNP per capita a good general indicator of the standard of living of a country? Why or why not?

3. Make a copy of the blank Comparative Data Table and label the first column Countries, the second column GNP per capita, 1998, and the third column GNP per capita, PPP, 1998. Compare GNP per capita and GNP per capita adjusted for PPP in six countries from six different regions of the world by following these steps:

  1. In the column at the left of the table, write the following countries and their regions. Brazil (South America); Ghana (Sub-Saharan Africa); Philippines (Asia, South and East, and the Pacific); Egypt (Middle East and North Africa); Canada (North and Central America and the Caribbean); Russian Federation (Europe and Central Asia).
  2. Use the Economic Data Tables to find the GNP per capita for each country and fill in column 2 in your table.
  3. Use the Economic Data Tables to find the GNP per capita adjusted for PPP for each country and fill in column 3 in your table. Are there any substantial changes in GNP per capita when it is adjusted for purchasing power parity? [For each country, the numbers in the PPP column are larger than the numbers in the GNP per capita column, ranging from Canada with a 1990 difference to Ghana where the numbers more than triple. Except for Canada and Brazil, the GNP per capita adusted for PPP was more than double the GNP per capita. This means the average income in each of these countries can buy more than twice the goods and services than is readily apparent looking at the GNP per capita.]
  4. On a separate piece of paper, classify each country as low, middle, or high income according to its GNP per capita adjusted for PPP. Did any of the countries change from one classification to another? What does this tell you about GNP per capita data? [Yes, Ghana moved from low- to middle-income.] What does this tell you about GNP per capita data? [While GNP per capita data give an accurate indication of the dollar value of a nation’s economy, they do not always accurately reflect how much each dollar is worth within that country. As a result, the categories of low-, middle-, and high-income, although accurate according to actual dollar amounts, may not reflect the true per capita purchasing power within countries.]

4. Take the Comparative Data Table you prepared for question 2 above, and add a sixth column labeled GNP per capita, PPP, 1998.

  1. Use the Data Tables to find the GNP per capita adjusted for PPP for each of your countries and fill in column 6 in your table. Are there any substantial changes in GNP per capita of each country when that GNP per capita is adjusted for purchasing power parity? [Answers will vary.]
  2. On a separate piece of paper, classify each country as low, middle, or high income according to its GNP per capita adjusted for PPP. Did any of the countries change from one classification to another? [Answers will vary.]
  3. Are differences between GNP per capita and GNP per capita adjusted for PPP reflected in any of the other indicators for the countries you chose? Explain. (For example, if one of your countries shifts from a middle-income to a high-income country when its GNP per capita is adjusted for PPP, does that country have a higher percentage of its population with access to safe water and sanitation than your other middle-income countries?) [Answers will vary.]
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