Question

Suppose an economy’s real GDP is $30,000 in year 1 and $31,200 in year 2. Instructions: In part a, enter your answer as a whole number. In part b, round your answer to 2 decimal places. a. What is the growth rate of its real GDP? Assume that population is 100 in year 1 and 102 in year 2. b. What is the growth rate of real GDP per capita?

Answer 1

Answer:

growth rate of real GDP = 4%

Growth rate of real GDP per capita  = 1.96 %

Explanation:

given data

economy’s real GDP year 1 = $30,000

economy’s real GDP year 2 = $31,200

to find out

growth rate of its real GDP and growth rate of real GDP per capita

solution

we get here growth rate of real GDP that is express as =

growth rate = (real GDP year 2 - real GDP year 1) ÷ real GDP year1   ......................1

put here value we get

growth rate of real GDP = $\frac{31200-30000}{30000}$

growth rate of real GDP = 4%

and

now we get first real GDP per capita that is express as

real GDP per capita = $\frac{GDP}{population}$   ..........2

real GDP per capita year 1 = $\frac{30000}{100}$

real GDP per capita year 1 = 300

and

real GDP per capita year 2 = $\frac{31200}{102}$

real GDP per capita year 2 = 305.882

so now Growth rate of real GDP per capita  will be as

Growth rate of real GDP per capita  = ( real GDP per capita year 2 - real GDP per capita year 1  ) ÷ real GDP per capita year 1    ............3

put here value we get

Growth rate of real GDP per capita  = $\frac{305.882-300}{300}$

Growth rate of real GDP per capita  = 1.96 %