Consider the following data for a particular country.
Real GDP per Capita, Year 1 Population, Year 1 and Year 2 (millions) Inflation Rate Growth Rate of Real GDP, Year 1 to Year 2
$36,000 500 2 percent 7 percent
Instructions:
In part a, enter your answer as a whole number. In part b, round your answer to 2 decimal places.
a. What is real GDP per capita in year 2?
b. What is real GDP in year 2?

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Tundexi Tundexi · Answer 1 · 2021-01-23T02:45:39+01:00

Answer:

Real GDP is inflation adjusted hence there will be no role of inflation. Real GDP per Capita = Real GDP/ Population

Real GDP in year 1 = Real GDP per capita * population

Real GDP in year 1 = $36,000 * 500 million

Real GDP in year 1 = $18 trillion

Growth rate of Real GDP = 7%

herefore Real GDP in year 2 = x - 18/18 = 7/100

Real GDP in year 2 => 100x - 1800 = 126

Real GDP in year 2 => 100x = 126 + 1800

Real GDP in year 2 => 100x = 1926

Real GDP in year 2 => x = 19.26 trillion

So, Real GDP per capita in year 2 = 19.26 trillion /500 million= 38,520