Question

Assuming Year 1 is the base year. The real GDP is 200 for year 1, and 210 for year 2. The nominal GDP is 200 for year 1, and 220 for year 2. Between Year 1 and Year 2, the growth rate of real GDP is _________. (Calculate the growth rate)

Answer 1

The growth rate of real GDP from Year 1 to Year 2 is 5%, calculated by using the formula that finds the percentage change in real GDP from one year to the next.

Step-by-step explanation:

The growth rate of real GDP from Year 1 to Year 2 can be calculated using the formula:

Growth Rate (%) = ((Real GDP in Year 2 - Real GDP in Year 1) / Real GDP in Year 1) × 100

Given that the real GDP is 200 for Year 1 and 210 for Year 2, the calculation is as follows:

Growth Rate (%) = ((210 - 200) / 200) × 100

Growth Rate (%) = (10 / 200) × 100

Growth Rate (%) = 0.05 × 100

Growth Rate (%) = 5%

Thus, the growth rate of real GDP from Year 1 to Year 2 is 5%.