Consider the following table for a hypothetical economy in which the initial level of GDP (
) in all cases is 1000.Assume that real GDP grows according to the equation
,where N is the number of years in the future.Numbers are rounded to the nearest whole number. Real GDP with Alternative Growth Rates
TABLE 25-1
Note: This question requires a calculator with an exponent function.
Refer to Table 25-1.If this economy is growing at an annual rate of 2%,then real GDP in Year 50 will be
A) 1645.
B) 1126.
C) 2692.
D) 500.
E) 51 000.
Correct Answer:
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