Question

Suppose real GDP for an economy changes from $16.5 trillion to $20.9 trillion. What is the rate of growth in real GDP? Provide your answer as a percent rounded to two decimal places. Do not include any symbols, such as "$,"","%," or ", " in your answer.

Answer 1

The rate of growth in real GDP for the economy, calculated using the percentage change formula, is 26.67 percent when rounded to two decimal places.

Step-by-step explanation:

To calculate the rate of growth in real GDP, we need to use the formula for percentage change. The change in GDP is the difference between the new GDP value and the original GDP value, which we will then divide by the original GDP value to get the growth rate. So in this instance, the change in GDP is $20.9 trillion minus $16.5 trillion, resulting in a GDP increase of $4.4 trillion.

The formula for the rate of growth in percentage terms is then:

(GDP increase / original GDP) × 100 = (4.4 trillion / 16.5 trillion) × 100

Performing the calculation:

(4.4 / 16.5) × 100 = 0.2667 × 100 = 26.67 percent

Therefore, the rate of growth in real GDP for the economy is 26.67 percent, when rounded to two decimal places.