In 2004,Freedonia had a population of 2,700 and real GDP of about 11,610,000.In 2005 it had a population of 2,500 and real GDP of about 10,000,000.What was the approximate growth rate of real GDP per person in Freedonia between 2004 and 2005?

Question

Quizplus · Accepted Answer

The growth rate of real GDP per person is calculated as the percentage change in real GDP per person from one year to the next. In this case, the real GDP per person in 2004 was 11,610,000/2,700 = 4,296.30. In 2005, the real GDP per person was 10,000,000/2,500 = 4,000.00. The percentage change in real GDP per person from 2004 to 2005 is (4,000.00 - 4,296.30)/4,296.30 * 100 = -6.89%. Therefore, the approximate growth rate of real GDP per person in Freedonia between 2004 and 2005 is -6.89%, which is closest to choice A) 7.5 percent.

In 2004,Freedonia Had a Population of 2,700 and Real GDP