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There are seven countries in G7. Their mean nominal GDP per capita is 50,101 USD and...

There are seven countries in G7. Their mean nominal GDP per capita is 50,101 USD and their median nominal GDP per capita is 45,031. Consider replacing the country with a nominal GDP of 35,335 USD with a country whose nominal GDP is 36,925 USD.

  

True or False: The G7 mean and median nominal GDP will increase.

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Answer #1

The answer is false.

Only the mean will increase and the median will stay the same

mean will increase as a lower income country is replaced by a higher income country as the aggregate income increases and mean = aggregate income / 7

Median is the central value, which in this case is the 4th country when the incomes of the countries is arranged in ascending order. Since the median income is higher than both the country that is replaced and the new country, it does not affect the position of the central value and the median continues to be 45,031 USD

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