Last year country A had a nominal GDP of $600 billion,a GDP deflator of 150 and a population of 40 million.Country B had a nominal GDP of $720 billion,a GDP deflator of 120 and a population of 50 million.From these numbers which country is likely to have had the higher standard of living?

Question

Quizplus · Accepted Answer

The best measure to compare the standard of living between countries is real GDP per person. Real GDP per person measures the value of goods and services produced within a country adjusted for inflation and divided by the population. Country B has a higher real GDP per person because it has a lower GDP deflator, which means that prices are relatively lower than in Country A. Therefore, option D is the correct answer.

Last Year Country a Had a Nominal GDP of $600