Consider the following table: Year Real GDP (millions of year 1 dollars) Populat
ID: 1189662 • Letter: C
Question
Consider the following table:
Year Real GDP (millions of year 1 dollars) Population (millions of people)
1 1,000,000 30
2 1,250,000 31
3 1,255,000 35
4 1,350,000 36
5 1,500,000 37
a) Calculate the real GDP per capita for each year.
b) Did this country experience economic growth in every year? Explain.
c) What was the average growth rate for real GDP per capita from Year 1 to Year 5?
d) Suppose that Year 6 has real GDP per capita of 42,000 and growths at the rate calculated in question c) How many years will it take real GDP per capita to double?
Explanation / Answer
a) Real GDP per capita is shown in tha table
b) No because in the 3rd year country has negative growth of approximately 20% in Real GDP per capita
c) Average growth rate is 5.6%
d) If growth rate is 5.6% so from rule of 70 we can see that no of years to double = 70/rate = 70/5.6 =Approximately 13 years
Year Real GDP (in millions) Populattion (in millions) Real GDP Per Capita Growth rate per year 1 1000000 30 33333.33 2 1250000 31 40322.58 20.97 3 1255000 35 35857.14 -11.07 4 1350000 36 37500.00 4.58 5 1500000 37 40540.54 8.11 Average growth rate 5.6