Chapter 25 ~ Answer to Study Question 25-2

Chapter 25 ~ Answer to Study Question 25-2 - Growth rate of...

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ANSWERS TO END-OF-CHAPTER QUESTIONS (Ch 25-2) 25-2 ( Key Question ) Suppose an economy’s real GDP is $30,000 in year 1 and $31,200 in year 2. What is the growth rate of its real GDP? Assume that population was 100 in year 1 and 102 in year 2. What is the growth rate of GDP per capita?
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Unformatted text preview: Growth rate of real GDP = 4 percent (= $31,200 - $30,000)/$30,000). GDP per capita in year 1 = $300 (= $30,000/100). GDP per capita in year 2 = $305.88 (= $31,200/102). Growth rate of GDP per capita is 1.96 percent = ($305.88 - $300)/300)....
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