Real GDP per person in the United States was $9,864 in 1950.Over the next 48 years, it grew at a compound annual rate of 2.0%.If, instead, real GDP per person had grown at an average compound annual rate 2.5%, then real GDP per capita in the United States in 1998 would have been approximately ______ larger.

Question

Quizplus · Accepted Answer

If real GDP per person grew at 2.5% instead of 2.0%, the GDP per person in 1998 would be approximately $6,751 larger. This is calculated using the formula for compound growth: Future Value = Present Value * (1 + growth rate)^number of years.

Real GDP Per Person in the United States Was $9,864