If real GDP rises from $700 billion to $704 billion,the economic growth rate is
A)($704 billion/$700 billion)/100.
B)($704 billion - $700 billion)/$700 billion.
C)$700 billion/$704 billion.

Question

Quizplus · Accepted Answer

The economic growth rate is calculated as the percentage change in real GDP. Using the formula, we get:

Economic growth rate = (New GDP - Old GDP)/Old GDP

= ($704 billion - $700 billion)/$700 billion

= $4 billion/$700 billion

= 0.0057 or 0.57%

So, the best choice is B, which matches this calculation.

If Real GDP Rises from $700 Billion to $704 Billion,the