Question

In 2011, the imaginary nation of Maconia had a population of 8,200 and real GDP of 210,500.

Maconia had 5% growth in real GDP per person. In 2012 it had a population of 8,400. To the nearest
dollar what was real GDP in Maconia in 2012?
a. 216,815
b. 221,025
c. 226,416
d. None of the above is correct.

Answer 1

C. 226,416

Step-by-step explanation:

Firstly, we find the GDP per person for 2011.

Next, we calculate the 5% GDP per person increase in 2012

Finally, we calculate for GDP in 2012 using available data gotten

So,

Given that

In 2011,

Real GDP = 210,500

Population = 8200

GDP per person for 2011 = 210,500 ÷ 8200

= 25.67 approximately.

In 2012, there was a 5% growth in GDP per person, therefore,

GDP person 5% increase in 2012 = (5÷100) × 25.6707317073

= 0.05 × 25.6707317073

= 1.2835365854

2012 GDP per person = 25.6707317073 + 1.2835

= 26.9542682927

Or

5% increase of 25.6707317073 = 25.6707317073 × 1.05 = 26.9542682927

So, to get the GDP in 2012,

GDP = GDP per person × population

Where GDP per person = 26.9542682927

Population = 8400

Thus,

Real GDP = 26.9542682927 × 8400

= 226,415.8

Approximately = 226,416 to the nearest dollar.