Real GDP per person in the country of Flip is $10,000, and the growth rate is 10 percent a year. Real GDP per person in the country of Flap is $20,000 and the growth rate is 5 percent a year. When will real GDP per person be greater in Flip than in Flap?

Question

Quizplus · Accepted Answer

In 15 years, Flip's real GDP per person will be $10,000 * (1 + 0.10)^15 = $25,937.42, while Flap's real GDP per person will be $20,000 * (1 + 0.05)^15 = $32,071.35.

Real GDP Per Person in the Country of Flip Is