Suppose that real GDP in a country is 10 trillion in the year 2005. With a growth rate of 2.5 perc e n t , wh at will be the per- c apita GDP in the year 2010?

Question

Quizplus · Accepted Answer

To calculate the GDP in the year 2010, we use the formula for compound growth: Future Value = Present Value * (1 + growth rate)^number of periods. Here, Present Value = 10 trillion, growth rate = 2.5% or 0.025, and number of periods = 2010 - 2005 = 5 years. So, Future Value = 10 * (1 + 0.025)^5 ≈ 11.3 trillion. The question asks for per-capita GDP but does not provide population data, so we assume it's asking for total GDP in 2010.

Suppose That Real GDP in a Country Is 10 Trillion