Economics:
Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Chapter 16, Problem 1E
To determine

Determine the growth of per capita GDP a better measure of economic growth than the growth of real GDP

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Explanation of Solution

Economic growth is estimated by the increase in real Gross Domestic Product, Increase in real Gross Domestic Product in turn increase the consumption power of that economy.

As both are important parameters to estimate the growth of an economy but when it comes to determining the standard living of the individuals we need to consider population. As Gross Domestic Per Capita is an important indicator of economic performance. If the Gross Domestic Product exceeds the population growth rate than there is a rise in living standards.

Economics Concept Introduction

Concept Introduction:

Growth Domestic Product per capita measures the total output of a country that accounts for its people. It is calculated by dividing the Gross Domestic Product with number of people

Real Gross Domestic Product measures the total output of an economy that value of all goods and services in a year

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Jim's Bank Account for the Year to 30 April 2008: We will start by calculating the balance of the business bank account, using the transactions provided. Opening Balance: Jim initially deposited €150,000 into his business bank account on 1 May 2007. Transactions: Receipts: Cash Sales (May 2007 to April 2008): €96,000 Credit Sales (Business customers): €19,600 (Note: This amount is not yet received as it is on credit, but it will be included in the Income Statement and not the bank balance at this stage.) Bank receipts from credit customers (amount owed at 30 April 2008): €6,800 Total Receipts:€96,000 (Cash Sales) + €6,800 (credit customer payments) = €102,800 Payments/Expenditures: Lease Payment (Paid in advance for five years): €50,000 Shop Fitting: €10,000 Assistant’s Wages: €250 per month × 12 months = €3,000 Telephone expenses: €800 Heat & Light expenses: €1,000 Jim’s withdrawals for personal expenditure: €1,000 × 12 months = €12,000 Accounting Fee (after the year-end):…
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