Suppose that,in 1950,Japan had an initial per capita GDP of $12,000 per year and China had a per capita GDP of $5,000.But China is growing at 5 percent per year and Japan is growing at 2 percent per year.__________ is richer in 2000 with a per capita GDP of approximately __________.
A)Japan;$32,299
B)Japan;$57,337
C)China;$57,337
D)China;$137,608
E)Not enough information is given.

Question

Quizplus · Accepted Answer

First, we use the formula for calculating per capita GDP growth over time, which is:
Per Capita GDP in Year X = Initial Per Capita GDP * (1 + Growth Rate) ^ Number of Years

For Japan in 2000:
Per Capita GDP in 2000 = $12,000 * (1 + 0.02) ^ 50 = $32,299

For China in 2000:
Per Capita GDP in 2000 = $5,000 * (1 + 0.05) ^ 50 = $57,337

Therefore, China is richer in 2000 with a per capita GDP of approximately $57,337.

Suppose That,in 1950,Japan Had an Initial Per Capita GDP of $12,000