Measured in 2011 dollars, the GDP per person of the world was $1,122 in 1820. By 2010, the world's income per person had risen to
A) nearly $1200, almost twice the level of 1820.
B) $2,422, almost four times the level of 1820.
C) a little more than $3,600, approximately six times the level of 1820.
D) $13,070, nearly twelve times the level of 1820.

Question

Measured in 2011 dollars, the GDP per person of the world was $1,122 in 1820.  By 2010, the world's income per person had risen  to
A) nearly $1200, almost twice the level of 1820.
B) $2,422, almost four times the level of 1820.
C) a little more than $3,600, approximately six times the level of 1820.
D) $13,070, nearly twelve times the level of 1820.

Quizplus · Accepted Answer

To find the increase in GDP per person, we need to calculate the percentage increase over the period of 1820-2010. Using the formula for annual growth rate, we get:

[(2010 GDP per person / 1820 GDP per person) ^(1/190)] - 1 = annual growth rate

[(13070 / 1122) ^(1/190)] - 1 = 1.657 - 1 = 0.657 = 65.7%

This means that the GDP per person increased by an average of 65.7% each year between 1820 and 2010. To find the actual increase from 1820 to 2010, we use the formula:

1820 GDP per person * (1 + annual growth rate)^190 = 2010 GDP per person

1122 * (1 + 0.657)^190 = 13070

Therefore, the GDP per person in 2010 was $13,070, nearly twelve times the level of 1820. Choice D is the correct answer.

Measured in 2011 Dollars, the GDP Per Person of the World