Question

# Year Nominal GDP (billions of current \$) Inflation rate Population (millions) 2014 9807 2% 79 2015...

Year Nominal GDP
(billions of current \$)
Inflation rate Population
(millions)
2014 9807 2% 79
2015 10520 1% 83
2016 10678 1% 88

Using the information in the table above, calculate economic growth for 2015.  Give your answer to two decimal places.
%

Nominal GDP in 2014 = \$9,807 billion

Nominal GDP in 2015 = \$10,520 billion

Calculate the growth rate of nominal GDP -

Growth rate = [(Nominal GDP in 2015 - Nominal GDP in 2014)/Nominal GDP in 2014] * 100

Growth rate = [(\$10,520 billion - \$9,807 billion)/\$9,807 billion] * 100

Growth rate = 7.27%

The growth rate of nominal GDP is 7.27%

Economic growth rate is the growth rate of real GDP.

Growth rate of real GDP = Growth rate of nominal GDP - Inflation rate

Growth rate of real GDP = 7.27% - 1% = 6.27%

Thus,

The economic growth for 2015 is 6.27%

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