Suppose an economy’s real gdp is $40,000 in year 1 and $42,200 in year 2. what is the growth rate of its real gdp? instructions: round your answer to two decimal places. the growth rate of the economy's real gdp = % assume that population is 100 in year 1 and 102 in year 2. what is the growth rate of real gdp per capita? instructions: round your answer to two decimal places. the growth rate of the economy's real gdp per capita = %

The growth rate of the economy´s real GDP = 5.50%

The growth rate of the economy´s real GDP per capita= 3.43%

Explanation:

The GDP growth rate formula is:

[GDP(t)- GDP(t-1)/ GDP(t-1)]*100

t is years. We use this formula for this problem:

($42,200-$40,000)/ $40,000= 0.055*100= 5.50%

The growth rate of the economy´s real GDP = 5.50%

The formula of the real GDP per capita is:

Real GDP per capita = Real GDP(t)/ population(t)

Year 1:

Real GDP per capita= $40,000/100= $400

Year 2:

Real GDP per capita= $42,200/102= $413.72

To calculate the growth rate of the real GDP per capita we use the same the same formula before but now with real GDP per capita

($413.72-$400)/$400= 0.0343 = 3.43%

The growth rate of the economy´s real GDP per capita= 3.43%

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