Suppose an economy’s real GDP is $100,000 in year 1 and $110,000 in year 2. What is the growth rate of its GDP? Assume that population was 200 in year 1 and 205 in year 2. What is the growth rate in GDP per capita?
Please provide the best answer for the statement.
$10,000/$100,000 or 10% from year 1 to year 2. The per capital growth can be calculated as follows: 500 per capital income in year 1 ($100,000/200); $536.59 per capital income in year 2($110,000/205). The change is 36.59 compared to base of $500 or 36.59/500 = 7.32%.
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