Growth rate of its real GDP
Assume an economy’s real GDP is $30,000 in year 1 and $31,200 in year 2. Describe the growth rate of its real GDP? Suppose that population was 100 in year 1 and 102 in year 2. Explain rate of GDP per capita?
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Growth rate of real GDP will be 4 percent (= $31,200 - $30,000)/$30,000). GDP per capita in year 1 will be $300 (= $30,000/100). GDP per capita in year 2 is $305.88 (= $31,200/102). Growth rate of GDP per capita is 1.96 percent is ($305.88 - $300)/300).
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