Question

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.
     %   

Answer 1

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%