Q:

What is the way calculate real GDP per capita?

A:

Quick Answer

To calculate the real gross domestic product, or GDP, per capita, which reflects the total output of the country, the gross domestic product should be divided by the population of the country. GDP can be calculated for any size of population, but it is often used for populations of countries.

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Full Answer

The GDP is a direct indicator of the economy of a country and of the living standards of that country. It is indicative of the amount of money that people in the country make and the amount of items that the country is exporting. When the economy is in a recession, the GDP of that country will be lower as a result of people working less, needing fewer accommodations and producing fewer goods to be sent out to other areas. When the economy is good, people will spend more money on products, will often purchase more luxury products and industries will produce more products. The production of more products is a direct result of the demand that is set by the people of the country and can be a result of a higher number of citizens employed by the production company. When other countries are suffering from a recession, the GDP of countries that export to those countries can be affected as a result of a lower demand of goods.

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