Question

If GDP was $15 trillion in 2015 and $18 trillion in 2016, what would be the real growth?

Options:
A) $3 trillion
B) 15%
C) $5 trillion
D) 20%

Answer 1

To determine the real GDP growth rate, the change in GDP ($3 trillion) is divided by the average GDP of the two years ($16.5 trillion), resulting in a growth rate of about 18%. None of the options provided match this exactly, but one is close.

Step-by-step explanation:

To calculate the real growth rate of GDP, we need to take the change in GDP and divide by the average GDP between the two years. The nominal growth is simply $18 trillion - $15 trillion = $3 trillion. The average GDP over the two years is ($18 trillion + $15 trillion) / 2 = $16.5 trillion. Therefore, the real growth rate is the change in GDP ($3 trillion) divided by the average GDP ($16.5 trillion), which gives us approximately 0.1818 or 18.18%. This can be rounded to approximately 18%, so none of the provided options is exactly correct, but option B (15%) is closest without going over.