Question

1. Suppose that between 2015 and 2016, nominal GDP grew by 6%. If the price level grew by 2% and population grew by 1.5%, real per capita GDP grew by___________ %.
2. If real per capita GDP continues to grow at this rate, it would double in__________ years.
Give your answer to the second decimal.

Answer 1

Answer:

a. real per capita GDP grew by 2.5%

b. it would double in 28 years

Explanation:

a) Real per capita GDP grew by

Nominal GDP - Price level - Population Grow

= 6%-2%-1.5%

= 2.5%

b) As per rule of 70, the GDP would double in:

= 70/2.5

= 28 years