Question

Last year the imaginary nation of Panglossia had real GDP of 400 billion. This year it had real GDP of 472.5 billion. Which of the following changes in population is consistent with a 5 percent growth rate of real GDP per person over the last year?

a. The population decreased from 75 million to 72 million.
b. The population decreased from 60 million to 50 million.
c. The population increased from 70 million to 80 million.
d. The population increased from 80 million to 90 million.

Answer 1

D) The population increased from 80 million to 90 million.

Step-by-step explanation:

if Panglossia's real GDP increased from $400 billion to $472.5 billion, it means it increased 18.13%

we must determine the real GDP per capita:

• year 1 = $400 billion / 80 million = $5,000
• year 2 = $472.5 billion / 90 million = $5,250

the change in real GDP per capita = ($5,250 - $5,000) / $5,000 = $250 / $5,000 = 0.05 or 5%

*only two options were possible C and D, and I tried both of them.