Question

If real GDP in a small country in 2015 is $8 billion and real GDP in the same country in 2016 is $8.3 billion, the growth rate of real GDP between 2015 and 2016

A)is 3.0%.
B)is 3.6%.
C)is 3.75%.
D)cannot be determined from the information given.

Answer 1

The growth rate of real GDP between 2015 and 2016 for the small country is calculated to be 3.75% using the real GDP figures provided for both years.

Step-by-step explanation:

To calculate the growth rate of real GDP from one year to the next, you need to follow the formula:

Growth Rate = ((Real GDP in current year – Real GDP in previous year) / Real GDP in previous year) × 100%

Applying this formula to the provided real GDP values for the small country:

• Real GDP in 2015 = $8 billion
• Real GDP in 2016 = $8.3 billion

The growth rate is calculated as follows:

Growth Rate = (($8.3 billion - $8 billion) / $8 billion) × 100%

Growth Rate = ($0.3 billion / $8 billion) × 100%

Growth Rate = 3.75%

Therefore, the growth rate of real GDP between 2015 and 2016 for the small country is 3.75%.