Question

Suppose real GDP in the U.S. was $19,000 billion in 2019 and $18,900 billion in 2020. Assume that population in the U.S. was 0.32 billion in 2019 and 0.35 billion in 2020.

a. What was the growth rate of real GDP from 2019-2020?

b. Calculate GDP per capita in both 2019 and 2020.

c. What was the growth rate of real GDP per capita from 2019-2020?

Answer 1

(a)

Year	Real GDP ($ billion)	Population (billion)
2019	19000	0.32
2020	18900	0.35

growth rate of real GDP = [(Real GDP of 2020 - Real GDP of 2019) / Real GDP of 2019] *100

growth rate of real GDP = [(18900 - 19000) / 19000]*100

growth rate of real GDP = -0.53%

(b)

Year	Real GDP ($ billion)	Population (billion)	Real GDP per capita ($)
2019	19000	0.32	59375
2020	18900	0.35	54000

Real GDP per capita = (Real GDP / Population)

(c) Growth rate of real GDP per capita = [(Real GDP per capita in 2020 - Real GDP per capita in 2019) / Real GDP per capita in 2019] * 100

Growth rate of real GDP per capita =[(54000 - 59375) / 59375]*100

Growth rate of real GDP per capita = -9.05%