DEPweb: GNP per Capita, Explore the Text Online

Contact Us • Help/FAQ • Index • Search

Home > DEP Home > DEPweb > Learning Modules > GNP per Capita

GNP per Capita

Complete these exercises with information from the Text.

Explore the Text Online
Note. The answers on this web page are not automatically saved. To save your answers, you must open a word processing or spread sheet document (Word, Excel, or others of your choice), and type in your answers there.


1.	Read the definition of GNP per capita and answer the following questions:

	a.	What does this indicator measure?

		Enter your answer in the space below:	Suggested answer:


	b.	Why is knowing GNP per capita helpful in studying development?

		Enter your answer in the space below:	Suggested answer:


2.	Read the definitions of low-income, middle-income, and high-income countries and answer the following questions:

	a.	What does this indicator measure?

		Enter your answer in the space below:	Suggested answer:


	b.	What would you expect the general living conditions to be like in a low-income country?

		Enter your answer in the space below:	Suggested answer:


	c.	What was the range of GNP per capita for middle-income countries in 1998?

		Enter your answer in the space below:	Suggested answer:


	d.	What would you expect the general living conditions to be like in a middle-income country?

		Enter your answer in the space below:	Suggested answer:


	e.	What was the range of GNP per capita for high-income countries in 1998?

		Enter your answer in the space below:	Suggested answer:


	f.	What would you expect the general living conditions to be like in a high-income country?

		Enter your answer in the space below:	Suggested answer:


3.	The items listed below would be included in calculating a country’s GNP. Which items are goods? Which are services?

		food housing teachers’ salaries home computers getting a haircut at the hairdressers

		Enter your answer in the space below:	Suggested answer:


4.	Answer each of the following questions briefly, referring back to the Text if necessary.

	a.	Name three factors that influence economic growth.

		Enter your answer in the space below:	Suggested answer:


	b.	How can population growth rate affect the GNP per capita growth rate?

		Enter your answer in the space below:	Suggested answer:


	c.	Does GNP per capita give a complete picture of the standard of living of all people in a country? Why or why not?

		Enter your answer in the space below:	Suggested answer:

Calculate GNP per capita for countries A and B using this formula: GNP ÷ Population = GNP per capita

	GNP	Total world population, 1998	GNP per capita. 1998
Country A	$16,512,000,000	103,200,000
Country B	$1,560,060,000,000	121,500,000

Based on your answers, identify each country as low income, middle income, or high income.

Enter your answer in the space below:

Suggested answer:

Use the population information below to complete the question that follows.

	Percentage of total world population, 1998	GNP per capita, 1998
Low-income economies	60%	$520
Middle-income economies	25%	$2,990
High-income economies	15%	$25,480

How many times greater is the average GNP per capita of high-income countries than that of low-income countries?

Enter your answer in the space below:

Suggested answer:

Read the definition of growth rates, then calculate the annual GNP per capita growth rates for countries A and B using the following formula:

Change
in GNP
per capita
in a year

GNP per
capita
at the start
of the year

100

Annual
GNP per
capita
growth rate (%)

	GNP per capita at the start of the year	GNP per capita at the end of the year	Changes in GNP per capita during the year	Annual GNP per capita growth rate
Country A	$113	$110
Country B	$1,590	$1,700

Note: Average annual growth rates of GNP per capita for a period of years provide a better picture than rates for a single year. Calculating any growth rate for a period longer than a year requires more complicated mathematical formulas than the one used to calculate an annual rate.

Enter your answer in the space below:

Suggested answer:

Purchasing power parity (PPP) is used to compare how much a dollar can buy in different countries. If GNP per capita goes up after being adjusted for PPP, one can buy more goods and services than the GNP per capita figure would suggest. If it goes down after adjustment, one can buy less than the figure would suggest. Look at the following table and answer the questions below.

	GNP per capita 1998	GNP per capita (PPP) 1998
Country A	$17,390	$23,790
Country B	$31,250	$27,940

In which country would you be able to purchase more with a dollar?

Enter your answer in the space below:

Suggested answer:

In which country is the average person likely to have the better standard of living?

Enter your answer in the space below:

Suggested answer:

Based on these data, in which country would you prefer to live? Explain your answer.

Enter your answer in the space below:

Suggested answer:


9.	Natural resource accounting tries to measure and allow for the costs of depleting natural resources and degrading the environment that can be part of economic growth. Listed below are some products that would add value to a country’s GNP. For each product, list some potential environmental and resource costs that might not be recognized in GNP, but which would be included in natural resource accounting.

	a.	Product: Wood furniture (List potential environmental and resource costs)

		Enter your answer in the space below:	Suggested answer:


	b.	Product: Food crops (List potential environmental and resource costs)

		Enter your answer in the space below:	Suggested answer:


	c.	Product: Electricity from a coal burning plant (List potential environmental and resource costs)

		Enter your answer in the space below:	Suggested answer:

Explore the Text:

	Contact Us \| Help/FAQ \| Index \| Search
	© 2001 The World Bank Group, All Rights Reserved. Terms and Conditions. Privacy Policy.