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Chapter 9: Q. 10 (page 210)

In 2018, a nation's population was 10 million. Its nominal GDP was \(40billion, and its price index was 100. In2019, its population had increased to 12million, its nominal GDP had risen to\)57.6billion, and its price index had increased to 120. What was this nation's economic growth rate during the year?

Short Answer

Expert verified

Nation's economic growth rate during the year is120%.

Step by step solution

01

Calculation for GDP real

In the base year of2014, nominal GDP was $40billion. In 2015, the nominal GDP with price index 120was $57.6billion.

The following formula can be used to determine the real GDP in2015:

GDP(real)=GDP(nominal)price index×100

GDP(real)=$57.6billion120×100

GDP(real)=$48billion

02

Calculation for growth rate

From 2014to 2015,.

Growth rate ,

=$48billion×100$40billion

=120%

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Most popular questions from this chapter

Consider the following table displaying annual growth rates for nations X,Yand Z, each of which entered2017 with real per capita GDP equal to$20,000.

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