GDP per capita in Australia is $50,000. If Australian GDP per capita grows 6 percent per year for 2 years, which formula shows its GDP per capita after 2 years?

Question

Quizplus · Accepted Answer

The correct formula to calculate the GDP per capita after 2 years with a 6 percent growth per year is to compound the growth rate for each year. This is done by multiplying the initial GDP per capita by 1.06 (representing a 6% increase) twice, once for each year.

GDP Per Capita in Australia Is $50,000