Chapter 19, Problem 23AA

To determine

To explain: The reason for per capita GDP provides a rough measure about a country’s relative prosperity.

Explanation of Solution

Per capita GDP is a tool to measure the prosperity of nations on the basis of their economic growth. This is determined by dividing the GDP of the country from the total population. The economic output per person is analyzed with the help of this measure.

Per capita GDP provides the measure of economic output given by an individual in an economy. This is determined by dividing the GDP from the total population of the country. This measure is used by economists to compare the economic growth among nations and is used as a rough measure to find the prosperity of a nation. A country will be considered to be prosperous when the purchasing power of the individuals in the country is more and this insight is provided by per capita GDP.