{"id":187,"date":"2024-09-30T14:26:12","date_gmt":"2024-09-30T18:26:12","guid":{"rendered":"https:\/\/pressbooks.bccampus.ca\/econ104\/?post_type=chapter&#038;p=187"},"modified":"2024-10-17T15:41:01","modified_gmt":"2024-10-17T19:41:01","slug":"3-5-ppp-gdp-per-capita","status":"publish","type":"chapter","link":"https:\/\/pressbooks.bccampus.ca\/econ104\/chapter\/3-5-ppp-gdp-per-capita\/","title":{"raw":"3.5 Working with macroeconomics data: PPP GDP per capita of countries around the world","rendered":"3.5 Working with macroeconomics data: PPP GDP per capita of countries around the world"},"content":{"raw":"Sustained growth in GDP continues to be a primary predictor for improvements in quality of living. Small differences in growth rates over times can lead to significantly different outcomes. This lab explores these questions:\r\n<ul>\r\n \t<li>How are these differences measured?<\/li>\r\n \t<li>How are the outcomes compared?<\/li>\r\n<\/ul>\r\n<div class=\"textbox textbox--learning-objectives\"><header class=\"textbox__header\">\r\n<h2 class=\"textbox__title\">Learning outcomes<\/h2>\r\n<\/header>\r\n<div class=\"textbox__content\">\r\n<ul>\r\n \t<li>Understand the definition of PPP GDP per capita.<\/li>\r\n \t<li>Calculate growth rates and compound growth rate and discuss your results.<\/li>\r\n \t<li>Improve your calculating and graphing skills in Excel.<\/li>\r\n<\/ul>\r\n<\/div>\r\n<\/div>\r\n<h2>Step 1: Download the data<\/h2>\r\nDownload data about the real GDP per capital of two countries from 2000 to the most recent year available.\r\n<ol type=\"a\">\r\n \t<li>Go to the <a href=\"https:\/\/databank.worldbank.org\/source\/world-development-indicators\/preview\/on\">World Development Indicators.<\/a><\/li>\r\n \t<li>In the <strong>Variables<\/strong> tab, make the following selections:\r\n<ul>\r\n \t<li><strong>Database<\/strong>: Check <strong>World Development Indicators<\/strong> (this is the default value)<\/li>\r\n \t<li><strong>Country:<\/strong> Click the <strong>X<\/strong> to unselect all. Then select <strong>Canada<\/strong> and a country starting with the first letter of your first name. (If there is no data for this period for a country that starts with the first letter of your name, choose a country starting with the next letter in the alphabet.)<\/li>\r\n \t<li><strong>Series:\u00a0<\/strong>Click the <strong>X<\/strong> to unselect all. Then select <strong>GDP per capita, PPP (Constant 2017 International $)<\/strong>.<\/li>\r\n \t<li><strong>Time: <\/strong>Click the <strong>X<\/strong> to unselect all. Then select <strong>2000<\/strong> and the most recent year (e.g., 2023).<\/li>\r\n<\/ul>\r\n<\/li>\r\n \t<li>In the Layout tab, make the following selections:\r\n<ul>\r\n \t<li><strong>Orientation<\/strong><\/li>\r\n \t<li>For <strong>Time<\/strong>, select <strong>Row<\/strong>.<\/li>\r\n \t<li>For <strong>Series<\/strong>, select <strong>Row<\/strong>.<\/li>\r\n \t<li>For <strong>Country<\/strong>, select <strong>Column<\/strong>.<\/li>\r\n<\/ul>\r\n<\/li>\r\n \t<li>In the pop-up window, click <strong>Apply changes<\/strong>.<\/li>\r\n \t<li><span style=\"text-align: initial;font-size: 1em\">Click <\/span><strong style=\"text-align: initial;font-size: 1em\">Download options<\/strong><span style=\"text-align: initial;font-size: 1em\"> and choose <\/span><strong style=\"text-align: initial;font-size: 1em\">Excel<\/strong><span style=\"text-align: initial;font-size: 1em\">.<\/span><\/li>\r\n \t<li>In the <strong style=\"text-align: initial;font-size: 1em\">Preview<\/strong><span style=\"text-align: initial;font-size: 1em\"> section, click <\/span><strong style=\"text-align: initial;font-size: 1em\">GDP per capita, PPP, Constant 2017 International $<\/strong><span style=\"text-align: initial;font-size: 1em\"> and read the definition of GDP per capita, PPP (constant 2017 International $).<\/span><\/li>\r\n \t<li>Read the first paragraph of <strong style=\"text-align: initial;font-size: 1em\">Purchasing Power Parity<\/strong><span style=\"text-align: initial;font-size: 1em\"> for a definition.<\/span><\/li>\r\n<\/ol>\r\n<h2>Step 2: Calculate the annual growth rates and generate the graph<\/h2>\r\n<ol type=\"a\">\r\n \t<li>In your Excel workbook, calculate the year-to-year real GDP per capita growth rate for both countries using formulas.<\/li>\r\n \t<li>Generate a graph showing the GDP per capita and its growth rates over time for the country of your choice. The graph in Figure 3.1 is an example.\r\n<ul>\r\n \t<li>The graph should have years on the x-axis, and it should have two y-axes.<\/li>\r\n \t<li>The left y-axis should show real GDP\/capita. Consider changing the starting value of your y-axis to show your data clearly.<\/li>\r\n \t<li>The right y-axis should show growth rate. Make sure it is clear what each axis represents.<\/li>\r\n \t<li>Use two different chart types for the real GDP per capita and its growth rate.<\/li>\r\n<\/ul>\r\n<\/li>\r\n \t<li>Analyze your graph. What can you say about the trend of the economic growth of the two countries?<\/li>\r\n<\/ol>\r\n<h5 style=\"text-align: left\"><strong>Figure 3.1<\/strong><\/h5>\r\n<h5 style=\"text-align: left\">Canadian Real GDP per Capita and its Growth Rate<\/h5>\r\n<img class=\"alignnone wp-image-324\" src=\"https:\/\/pressbooks.bccampus.ca\/econ104\/wp-content\/uploads\/sites\/2254\/2024\/09\/econ104_Fig3.1-1024x576-1-300x186.jpg\" alt=\"Graph showing annual growth rate and GDP per capita, 2002-2021\" width=\"463\" height=\"287\" \/>\r\n<h2>Step 3: Calculate compound growth<\/h2>\r\n<ol type=\"a\">\r\n \t<li>Calculate the average annual compound growth rate from 2000\u20132022 for Canada. <strong>Hint<\/strong>: A country grew x% every year to go from the GDP per capita for 2000 to that of 2022. There are 22 periods from 2000\u20132022.<\/li>\r\n \t<li>Repeat the process to calculate the average annual compound growth rate from 2000\u20132019 and from 2020\u20132022.\u00a0Apply the rule of 70.<\/li>\r\n<\/ol>","rendered":"<p>Sustained growth in GDP continues to be a primary predictor for improvements in quality of living. Small differences in growth rates over times can lead to significantly different outcomes. This lab explores these questions:<\/p>\n<ul>\n<li>How are these differences measured?<\/li>\n<li>How are the outcomes compared?<\/li>\n<\/ul>\n<div class=\"textbox textbox--learning-objectives\">\n<header class=\"textbox__header\">\n<h2 class=\"textbox__title\">Learning outcomes<\/h2>\n<\/header>\n<div class=\"textbox__content\">\n<ul>\n<li>Understand the definition of PPP GDP per capita.<\/li>\n<li>Calculate growth rates and compound growth rate and discuss your results.<\/li>\n<li>Improve your calculating and graphing skills in Excel.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<h2>Step 1: Download the data<\/h2>\n<p>Download data about the real GDP per capital of two countries from 2000 to the most recent year available.<\/p>\n<ol type=\"a\">\n<li>Go to the <a href=\"https:\/\/databank.worldbank.org\/source\/world-development-indicators\/preview\/on\">World Development Indicators.<\/a><\/li>\n<li>In the <strong>Variables<\/strong> tab, make the following selections:\n<ul>\n<li><strong>Database<\/strong>: Check <strong>World Development Indicators<\/strong> (this is the default value)<\/li>\n<li><strong>Country:<\/strong> Click the <strong>X<\/strong> to unselect all. Then select <strong>Canada<\/strong> and a country starting with the first letter of your first name. (If there is no data for this period for a country that starts with the first letter of your name, choose a country starting with the next letter in the alphabet.)<\/li>\n<li><strong>Series:\u00a0<\/strong>Click the <strong>X<\/strong> to unselect all. Then select <strong>GDP per capita, PPP (Constant 2017 International $)<\/strong>.<\/li>\n<li><strong>Time: <\/strong>Click the <strong>X<\/strong> to unselect all. Then select <strong>2000<\/strong> and the most recent year (e.g., 2023).<\/li>\n<\/ul>\n<\/li>\n<li>In the Layout tab, make the following selections:\n<ul>\n<li><strong>Orientation<\/strong><\/li>\n<li>For <strong>Time<\/strong>, select <strong>Row<\/strong>.<\/li>\n<li>For <strong>Series<\/strong>, select <strong>Row<\/strong>.<\/li>\n<li>For <strong>Country<\/strong>, select <strong>Column<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<li>In the pop-up window, click <strong>Apply changes<\/strong>.<\/li>\n<li><span style=\"text-align: initial;font-size: 1em\">Click <\/span><strong style=\"text-align: initial;font-size: 1em\">Download options<\/strong><span style=\"text-align: initial;font-size: 1em\"> and choose <\/span><strong style=\"text-align: initial;font-size: 1em\">Excel<\/strong><span style=\"text-align: initial;font-size: 1em\">.<\/span><\/li>\n<li>In the <strong style=\"text-align: initial;font-size: 1em\">Preview<\/strong><span style=\"text-align: initial;font-size: 1em\"> section, click <\/span><strong style=\"text-align: initial;font-size: 1em\">GDP per capita, PPP, Constant 2017 International $<\/strong><span style=\"text-align: initial;font-size: 1em\"> and read the definition of GDP per capita, PPP (constant 2017 International $).<\/span><\/li>\n<li>Read the first paragraph of <strong style=\"text-align: initial;font-size: 1em\">Purchasing Power Parity<\/strong><span style=\"text-align: initial;font-size: 1em\"> for a definition.<\/span><\/li>\n<\/ol>\n<h2>Step 2: Calculate the annual growth rates and generate the graph<\/h2>\n<ol type=\"a\">\n<li>In your Excel workbook, calculate the year-to-year real GDP per capita growth rate for both countries using formulas.<\/li>\n<li>Generate a graph showing the GDP per capita and its growth rates over time for the country of your choice. The graph in Figure 3.1 is an example.\n<ul>\n<li>The graph should have years on the x-axis, and it should have two y-axes.<\/li>\n<li>The left y-axis should show real GDP\/capita. Consider changing the starting value of your y-axis to show your data clearly.<\/li>\n<li>The right y-axis should show growth rate. Make sure it is clear what each axis represents.<\/li>\n<li>Use two different chart types for the real GDP per capita and its growth rate.<\/li>\n<\/ul>\n<\/li>\n<li>Analyze your graph. What can you say about the trend of the economic growth of the two countries?<\/li>\n<\/ol>\n<h5 style=\"text-align: left\"><strong>Figure 3.1<\/strong><\/h5>\n<h5 style=\"text-align: left\">Canadian Real GDP per Capita and its Growth Rate<\/h5>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-324\" src=\"https:\/\/pressbooks.bccampus.ca\/econ104\/wp-content\/uploads\/sites\/2254\/2024\/09\/econ104_Fig3.1-1024x576-1-300x186.jpg\" alt=\"Graph showing annual growth rate and GDP per capita, 2002-2021\" width=\"463\" height=\"287\" srcset=\"https:\/\/pressbooks.bccampus.ca\/econ104\/wp-content\/uploads\/sites\/2254\/2024\/09\/econ104_Fig3.1-1024x576-1-300x186.jpg 300w, https:\/\/pressbooks.bccampus.ca\/econ104\/wp-content\/uploads\/sites\/2254\/2024\/09\/econ104_Fig3.1-1024x576-1-65x40.jpg 65w, https:\/\/pressbooks.bccampus.ca\/econ104\/wp-content\/uploads\/sites\/2254\/2024\/09\/econ104_Fig3.1-1024x576-1-225x140.jpg 225w, https:\/\/pressbooks.bccampus.ca\/econ104\/wp-content\/uploads\/sites\/2254\/2024\/09\/econ104_Fig3.1-1024x576-1-350x217.jpg 350w, https:\/\/pressbooks.bccampus.ca\/econ104\/wp-content\/uploads\/sites\/2254\/2024\/09\/econ104_Fig3.1-1024x576-1.jpg 738w\" sizes=\"auto, (max-width: 463px) 100vw, 463px\" \/><\/p>\n<h2>Step 3: Calculate compound growth<\/h2>\n<ol type=\"a\">\n<li>Calculate the average annual compound growth rate from 2000\u20132022 for Canada. <strong>Hint<\/strong>: A country grew x% every year to go from the GDP per capita for 2000 to that of 2022. There are 22 periods from 2000\u20132022.<\/li>\n<li>Repeat the process to calculate the average annual compound growth rate from 2000\u20132019 and from 2020\u20132022.\u00a0Apply the rule of 70.<\/li>\n<\/ol>\n","protected":false},"author":20,"menu_order":5,"template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[49],"contributor":[],"license":[],"class_list":["post-187","chapter","type-chapter","status-publish","hentry","chapter-type-numberless"],"part":146,"_links":{"self":[{"href":"https:\/\/pressbooks.bccampus.ca\/econ104\/wp-json\/pressbooks\/v2\/chapters\/187","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.bccampus.ca\/econ104\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/pressbooks.bccampus.ca\/econ104\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/econ104\/wp-json\/wp\/v2\/users\/20"}],"version-history":[{"count":25,"href":"https:\/\/pressbooks.bccampus.ca\/econ104\/wp-json\/pressbooks\/v2\/chapters\/187\/revisions"}],"predecessor-version":[{"id":337,"href":"https:\/\/pressbooks.bccampus.ca\/econ104\/wp-json\/pressbooks\/v2\/chapters\/187\/revisions\/337"}],"part":[{"href":"https:\/\/pressbooks.bccampus.ca\/econ104\/wp-json\/pressbooks\/v2\/parts\/146"}],"metadata":[{"href":"https:\/\/pressbooks.bccampus.ca\/econ104\/wp-json\/pressbooks\/v2\/chapters\/187\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/pressbooks.bccampus.ca\/econ104\/wp-json\/wp\/v2\/media?parent=187"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/econ104\/wp-json\/pressbooks\/v2\/chapter-type?post=187"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/econ104\/wp-json\/wp\/v2\/contributor?post=187"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/econ104\/wp-json\/wp\/v2\/license?post=187"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}