Calculation: Real GDP/GNI Per Capita and PPP
Measuring Economic Activity and Illustrating Its Variations
AO4·AO2
Syllabus requirement
Students must calculate per capita GDP and GNI by dividing by population, and interpret PPP-adjusted figures.
Assessment objectives
AO4 Use of Appropriate SkillsAO2 Application and Analysis
Summary
This topic explains how to calculate real GDP and real GNI per capita to compare average income or output across people and countries, and why purchasing power parity (PPP) is used to adjust for differences in price levels. Per capita measures divide real national income by population to show average material living standards, while PPP converts across currencies so comparisons reflect differences in the cost of goods and services rather than volatile market exchange rates.