Question

9-17. Based on data in Table 9-1 and in Table 9-3, if China's per capita real GDP continues to grow at the average rate it has experienced since 1990, will its per capita real GDP be twice as high as it is today within a decade? Explain your reasoning.

Answer 1

We can see that when the growth rate is 8%, value of $1 is increased to $2 after 9 years. This can be seen in table 9-3 where after 9 years, $1 compounded annually at 8% becomes $2.

According to this, China that has an average annual growth rate of 8.1 %, is likely to double its per capita real GDP within 9 years. Hence it is very much possible that it's per capita real GDP will be twice within a decade.