Question

If real GDP per capita in a country was $14,000 in year 1 and $14,560 in year 2, then the economic growth rate for this country from year 1 to year 2 was:

Answer 1

Given:

Real GDP per capita in a country in

Year 1 - $14,000

Year 2 - $14,560

To find:

Economic growth rate from Year 1 to Year 2

Solution:

The real economic growth rate, is the measure of the economic growth as it corresponds to the Gross Domestic Product from one particular period to the other, and is expressed in real terms as opposed to nominal terms.

`\Rightarrow \text{Economic Growth Rate }=\frac{\text { Year } 2 \text { - Year } 1}{\text { Year } 1} * 100 \rightarrow (14560-14000)/(14000) * 100\\\\\Rightarrow \text{Economic Growth Rate }=(560)/(14000) * 100 \rightarrow 0.04 * 100 \rightarrow 4 \%`

Therefore, the economic growth rate from year 1 to year 2 is 4%.