Question

If real GDP increased from $10 billion to $11 billion from the first quarter of 2016 to the first quarter of 2017, but had increased by 4% from the fourth quarter of 2016 to the first quarter of 2017, the BEA would report first quarter of 2017 GDP growth as _____ using the year-over-year method and _____ using the annualized method.

Answer 1

10%; 16%

Step-by-step explanation:

Given that,

Real GDP in the first quarter of 2016 = $10 billion

Real GDP in the first quarter of 2017 = $11 billion

Increased from the fourth quarter of 2016 to the first quarter of 2017 = 4%

Growth rate from the first quarter of 2016 to first quarter of 2017:

=
`(GDP_(2017)-GDP_(2016) )/(GDP_(2016))* 100`

=
`(11-10 )/(10)}* 100`

= 10%

Real GDP growth rate is as follows:

= 4% × 4

= 16%