Question

Country A had a population of 1,000, of whom 600 worked an average of 8 hours a day and had a productivity of 2.5. Country B had a population of 800, of whom 560 worked 8 hours a day and had productivity of 3.0. Country
a. A had the higher level of real GDP and Country B had the higher level of real GDP per person
b. B had the higher level of real GDP and Country A had the higher level of real GDP per person
c. A had the higher level of real GDP and real GDP per person.
d. B had the higher level of real GDP and real GDP per person

Answer 1

Answer:

The answer is d. B had higher real GDP and real GDP per capita.

Explanation:

Total real GDP of country A ( in one working day): Number of working persons x average working hour per day x productivity = 600 x 8 x 2.5 = 12,000;

Total real GDP of country B ( in one working day): Number of working persons x average working hour per day x productivity = 560 x 8 x 3 = 13,440;

GDP per capita of country A (in one working day): Total real GDP of A ( in one working day)/ total population of A = 12,000 / 1,000 = 12;

GDP per capita of country B (in one working day): Total real GDP of B ( in one working day)/ total population of B = 13,440 / 800 = 16.8.

Thus, country B had higher level of real GDP and real GDP per person in comparison to country A.