Download the file snapshots.pdf from www. stanford.edu/~chadj/snapshots.html and

Question

Download the file snapshots.pdf from www. stanford.edu/~chadj/snapshots.html and andswer the following. (At the moment, the latest year in the data file is 2010. Over time, this year will advance, so please use the lates year available in the Country Snapshots file whenever the year 2010 appears in questions below.)

(a) What was the ratio of per capita income in each of the following countries to that in the United States in the year 2010: Ethiopia, Mexico, India, and Japan?

(b) Which country had the faster average annual growth rate of per capita GDP between 1960 and 2010, Botswana or China?

(c) Rank these countries in order of population: Bangladesh, Brazil, Indonesia, Nigeria, Russia, the United States.

(d) Which is larger as a share of GDP in most rich countries, investment or government purchases? What about in most poor countries?

(e) Exchange rates are reported as units of domestic currency (like the Japanese yen or the British pound) per U.S. dollar. Look at the exchange rate for several countries. Do you detect any overall pattern? Why might that be?

Explanation / Answer

(a) Per capita income:

US = 42,140.2

Ethiopia = 1.9 = 0.0045%

Mexico = 28.5 = 0.068%

India = 8.9 = 0.02%

Japan = 75.6 = 0.18%,

of US GDP per capita.

(b) Growth rate of per capital GDP

Botswana = (26.7 - 4) / 4 x 100 = 567.5%

China = (19.4 - 5) / 5 x 100 = 288%

So, Botswana shows higher growth.

(c) Population:

Bangladesh = 150.5 mill

Brazil = 196.7 mill

Indonesia = 242.3 mll

Nigeria = 162.5 mill

Russia = 142.8 mill

US = 313.1 mill

So, ranked in descending order:

US > Indonesia > Brazil > Nigeria > Bangladesh > Russia

(d)

Investment/GDP ratio is almost always higher in the developed countries, than Government spending/GDP ratio. But in less developed or underdeveloped countries, Government Spending/GDP ratio is higher.

(e)

Exchange rates across countries cannot be clubbed as following a particular patter. Many countries show increasing trend over time, many other show decreasing trend, while a few show wild, erratic & random fluctuations.

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