Question

can you explain this problem and is there a formula?

100 = rate is approtion growth rate is T 7. The real GDP growth rate is 4.0%, the population growth rate is 1.2%. PIUUUCHNIPY 1 - 10 = 2 The Real GDP per person growth rate is approx. a. 5.2% b. 1.2% c. 4.0% d. 2.8% e. -2.8%

Answer 1

ANSWER:

Let the real gdp of the country in year 1 be 100

Let the population of country in year 1 be 100

Increase in real gdp growth rate = 4%

Increase in population growth rate = 1.2%

real gdp in year 2 = real gdp in year 1 + real gdp in year 1 * increase in real gdp growth rate = 100 + 100 * 4% = 100 + 4 = 104

population in year 2 = population in year 1 + population in year 1 * increase in population growth rate = 100 + 100 * 1.2% = 100 + 1.2 = 101.2

real gdp per capita in year 1 = real gdp in year 1 / population in year 1 = 100 / 100 = 1

real gdp per capita in year 2 = real gdp in year 2 / population in year 2 = 104 / 101.2 = 1.027668

Real gdp per capita growth rate = ( (real gdp per capita in year 2 - real gdp per capita in year 1) / real gdp per capita in year 1) * 100 = ( ( 1.027668 - 1) / 1) * 100 = 0.027668 * 100 = 2.7668% = 2.8%

so the correct answer is option d.