Suppose an economy’s real GDP is $50,000 in year 1 and $55,000 in year 2. What is the growth rate of its GDP? Assume that population was 100 in year 1 and 105 in year 2. What is the growth rate in GDP per capita?
Please provide the best answer for the statement.
$5000/$50,000 or 10% in year 1. The per capital growth can be calculated as follows: $500 per capital in year 1 ($50,000/100); $523.81 per capital in year 2 ($55,000/105). The change is 23.81 compared to base of $500 or 23.81/500 = 4.77%.
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