The numerical value of a country's goods and services after a certain amount of time, normally one year, is used to measure its GDP or gross domestic product.
It's a formula for measuring economic growth.
Then, to calculate GDP per capita, this volume of income is shared among a country's population.
The real GDP is used instead of the nominal GDP to measure GDP per capita since real GDP accounts for inflation and can be compared over years.
GDP per capita is sometimes used in combination with GDP to calculate a country's wealth and to compare a country's production to that of other countries on a global scale.
The formula for calculating GDP per capita formula is as follows:
GDP per capita = Real GDP / Population
Where the real GDP per capita formula is calculated by dividing a country's gross economic production by its population and adjusting for inflation.
It's used to measure living standards across countries and over time.
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How to Calculate GDP Per Capita?
GDP divided by population is the formula.
If you're looking at a single point in time in a single country, regular "nominal" GDP divided by the current population would work. The term "nominal" refers to GDP per capita calculated in current dollars.
When comparing GDP per capita between nations, purchasing power parity must be used. By matching a basket of identical commodities, establishes balance, or equality, between economies. It's a complex calculation that determines the value of a nation's currency based on what it can do in that country rather than its exchange rate value.
What is Per Capita Income?
The term "per capita" comes from the Latin word "by the head."
It's used to figure out what the average per person is in a particular calculation. Per unit is commonly used to calculate the gross domestic product (GDP) of a country per capita, for example. This metric compares the economic output of a business to the number of people living in the region.
How to Calculate Per Capita Income?
Per capita is calculated by taking into account a measurement or numerical quantity, which is then divided by the total population of the group being studied.
The per capita can be calculated using the per capita income formula below:
Per capita = Unit / Number of people in a population
Example of GDP Per Capita
How to Find Per Capita Income for America (USA)?
Answer: GDP per capita = Real GDP / Population
America (USA) had 20 Dollar trillion in gross domestic product in 2016. Additionally, 300 million people were living in the country in 2016. Using the given formula, you would calculate 20 trillion/300 million = 66,666. This means that the GDP per capita, or person, in the United States in 2016 was 66,666 Dollar, which equates to individuals making an average of $66,660 per person in 2016.
Nations with the Highest Per Capita GDP
According to the International Monetary Fund, the top 10 countries with the highest per capita GDP as of April 2019 are listed below (IMF).