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Suppose an economy’s real GDP is $30,000 in year 1 and $31,200 in year 2. What...

  1. Suppose an economy’s real GDP is $30,000 in year 1 and $31,200 in year 2. What is the growth rate of its real GDP? Assume that population is 100 in year 1 and 102 in year 2. What is the growth rate of real GDP per capita?
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Answer #1

The growth rate of real GDP=((RGDP in year 2 -RGDP in year 1)/RGDP in year 1)*100

the growth rate of its real GDP=((31200-30000)/30000)*100

=4%

the growth rate of its real GDP is 4%

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Per capita real GDP =RGDP/Population

Per capita real GDP in year 1=30000/100=300

Per capita real GDP in year 2=31200/102=305.882353

The growth rate of per capita real GDP =((305.882353-300)/300)*100

=1.96078433

the growth rate of per capita real GDP is 1.96%

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