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In Uganda GDP per person is $1,280 per year, and in Japan it is $39,100. What...

In Uganda GDP per person is $1,280 per year, and in Japan it is $39,100. What do you think is likely to happen to each country’s GDP per person if they both increase their physical capital per person by 20%? Which country do you expect to have a larger relative change in its output per person? Explain your answer.

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Answer #1

Here Gdp per person is also called Gdp per capita or standard of living

It is the ratio of gdp to the total number of person in the country

For uganda it is $1,280 per year and for japan it is $39,100 but if there is a 20% increase in both the country for physical capital then a great change will be seen in the country like uganda because here Gdp per person is very low and if spending is done then it will be betterment for the education ,society ,food facilities etc and most of the basic amenities.

On the other hand Japan where they have already all the basic resources for their population, it wil not add so much value and these type of reforms is very needed in the country like Uganda

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