Question

e. Output 15,000 7. The real GDP growth rate is 4.0%, the population growth rate is 1.2%. 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 7

The correct answer is (d) 2.8%

Formula :

Growth rate of (A/B) = Growth rate of A - Growth rate of B (i.e. % change in (A/B) = % change in A - % change in B)

Real GDP per person = Real GDP/Population

Thus using above formula :

Growth rate of (Real GDP per person) = Growth rate of (Real GDP/Population)

=> Growth rate of (Real GDP per person) = Growth rate of (Real GDP) - Growth rate of (Population).

It is given that Growth rate of (Real GDP) = 4% and Growth rate of (Population) = 1.2%

=> Growth rate of (Real GDP per person) = Growth rate of (Real GDP) - Growth rate of (Population)

= 4% - 1.2% = 2.8%

Thus, Growth rate of (Real GDP per person) = 2.8%

Hence, the correct answer is (d) 2.8%