Chapter 6: Problem 33

The Czech Republic has a GDP of 1,800 billion koruny. The exchange rate is 25 koruny/U.S. dollar. The Czech population is 20 million. What is the GDP per capita of the Czech Republic expressed in U.S. dollars?

Short Answer

Expert verified

The GDP per capita of the Czech Republic expressed in U.S. dollars is $3,600$.

Step by step solution

Calculate GDP per capita in koruny

To find the GDP per capita in koruny, we need to divide the total GDP by the population. Use the formula: GDP per capita = Total GDP / Population In this case, the total GDP is 1,800 billion koruny, and the population is 20 million. GDP per capita in koruny = $ \frac{1,800 \text{ billion koruny}}{20 \text{ million}} $

Convert koruny to billions and millions

Before calculating the GDP per capita in koruny, it's helpful to convert both values to the same unit, in this case billion. There are 1,000 million in a billion. Thus, GDP in billions = 1,800 billion koruny Population in billions = $ \frac{20 \text{ million}}{1,000} $ = 0.02 billion Now we can plug these numbers back into the formula: GDP per capita in koruny = $ \frac{1,800 \text{ billion koruny}}{0.02 \text{ billion}} $

Calculate the GDP per capita in koruny

With both values in billions, we can now easily calculate the GDP per capita in koruny: GDP per capita in koruny = $ \frac{1,800}{0.02} $ = 90,000 koruny

Convert GDP per capita from koruny to U.S. dollars

Now that we know the GDP per capita in koruny, we can convert it to U.S. dollars using the given exchange rate of 25 koruny/U.S. dollar: GDP per capita in U.S. dollars = $ \frac{GDP \text{ per capita in koruny}}{Exchange Rate} $ = $ \frac{90,000 \text{ koruny}}{25 \text{ koruny/U.S. dollar}} $

Calculate the GDP per capita in U.S. dollars

Finally, we have all the information needed to find the GDP per capita in U.S. dollars: GDP per capita in U.S. dollars = $ \frac{90,000}{25} $ = 3,600 U.S. dollars Therefore, the GDP per capita of the Czech Republic expressed in U.S. dollars is $3,600.