ECON 25200 Lecture 12: ECON 25200 #12
Why are Americans so much richer than Indians or Mexicans?
U.S. in 2016:
GDP = 18.567 trillion
Population = 347.61 million
GDP per capita = $53,413/person
Peru in 2016
GDP = 648.72 sols
Population = 31.66 million
GDP per capita = 20,490 sols/person
Norway in 2016
GDP = 3.874 billion krone
Population = 5.26 million people
GDP per capita = 736,502 krone
Find the exchange rate:
Peru’s GDP in $ = GDP Per in sols * $/sols = 20,490 * 1/(3.38)
~ $6,425
US GDP > Peru GDP
Norway: 736,502 * 0.122 - $189,653
2 problems with exchange
1) Fluctuates
2) Cost of living
