The president of Saint Albin, a little-known Caribbean island nation, has generated some controversy by stating...

 

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The president of Saint Albin, a little-known Caribbean island nation, has generated some controversy by stating that they are the healthiest economy on earth because their country's nominal GDP growth is 10% per year. US economists, however, say that Saint Albin's economy is in dire straits because their real GDP per capita is falling at 2% per year. If Saint Albin's population growth rate averages 1% per year, can both the president of Saint Albin and the US economists be correct? How? The president of Saint Albin, a little-known Caribbean island nation, has generated some controversy by stating that they are the healthiest economy on earth because their country's nominal GDP growth is 10% per year. US economists, however, say that Saint Albin's economy is in dire straits because their real GDP per capita is falling at 2% per year. If Saint Albin's population growth rate averages 1% per year, can both the president of Saint Albin and the US economists be correct? How?

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Lets think through this stepbystep Saint Albins nominal GDP growth is 10 per year This just means th... View the full answer