Scenario: In 2010, world GDP per capita was $9,500. In the same year, the Economist magazine forecast that in 2020, world GDP per capita would be $15,000
-Refer to the scenario above.The Economist magazine also forecasts that the rate of growth will remain constant through 2030.If this is correct,then world GDP per capita in 2030 will be closest to ________.

Question

Quizplus · Accepted Answer

To calculate the expected GDP per capita in 2030, we can use the constant growth rate formula:
GDP per capita in 2030= $15,000 x (1+r)^10, where r is the constant growth rate.
Since the rate of growth is assumed to remain constant, we can use the formula to get:
GDP per capita in 2030= $15,000 x (1+r)^10= $15,000 x (1+0.057)^10= $15,000 x 1.7958= $26,937
Therefore, the answer is closest to C, $24,000.

Scenario: in 2010, World GDP Per Capita Was $9,500