Chapter 5: 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 U.S. dollars.

Step by step solution

Calculate the GDP per capita in koruny.

To calculate the GDP per capita in koruny, we will divide the total GDP by the population. The formula is: GDP per capita = (Total GDP) / (Population) We have the total GDP, which is 1,800 billion koruny, and the population, which is 20 million.

Substitute the given values.

Now, we will substitute the given values into the formula: GDP per capita = (1,800 billion koruny) / (20 million)

Calculate the GDP per capita in koruny.

Performing the calculations, we get: GDP per capita = 1,800,000,000,000 koruny / 20,000,000 = 90,000 koruny So, the GDP per capita in koruny is 90,000 koruny.

Convert the GDP per capita to U.S. dollars.

Now we need to convert the GDP per capita in koruny to U.S. dollars. We'll use the given exchange rate, which is 25 koruny per U.S. dollar. The formula is: GDP per capita in U.S. dollars = (GDP per capita in koruny) / (Exchange rate) Substitute the values: GDP per capita in U.S. dollars = (90,000 koruny) / (25 koruny/U.S. dollar)

Calculate the GDP per capita in U.S. dollars.

Performing the calculation, we get: GDP per capita in U.S. dollars = 90,000 koruny / 25 koruny/U.S. dollar = 3,600 U.S. dollars So, the GDP per capita of the Czech Republic expressed in U.S. dollars is 3,600 U.S. dollars.