Economics and Statistics

Per Capita GDP: Real GDP adjusts for prices, per capita gdp adjusts for population size. Countries with large populations have large GDP's  since their supply of labor and human capital allows them to produce more output than countries with smaller populations. The real average income is given by the following formula: The following table shows the top five largest economies, and the top five per capita GDP: Countries  Nominal GDP ($ million)  Countries  p.c GDP U.S.A $21,439,453 Luxembourg $ 113,196 China $ 14,140,163 Switzerland $ 83,716 Japan $ 5,154,475 Norway $77,975 Germany $ 3,863,344 Ireland $ 77,771 India $ 2,935,570 Qatar $68,687 Notice that the top five countries with the largest economies are not in the top five countries with largest per capita GDP's. Per Capita GDP provides a much better measure (though still imperfect) of the standard of living in a country than GDP. Furthermore, real per capita GDP provides a way to estimate how productive, on av...