Question

Last year the imaginary nation of Freedonia had a population of 2,700 and real GDP of 16,200,000. This year it had a population of 2,500 and real GDP of 14,640,000. What was the growth rate of real GDP per person between last year and this year?

Answer 1

-2.4%

Step-by-step explanation:

The GDP per person of the nation of Freedonia for the current and last year, respectively, are:

`GDP_C = (14,640,000)/(2,500)=5,856\\GDP_L = (16,200,000)/(2,700)=6,000`

The growth rate (R) between this year and last year is given by:

`R=(GDP_C-GDP_L)/(GDP_L)\\R=(5,856-6,000)/(6,000)\\R=-0.024 = -2.4\%`

The growth rate of real GDP per person was -2.4%.