Over the past decade, a nation's real Gross Domestic Product (GDP) grew at a constant rate of 10 percent per year while its population grew 8 percent annually. Forecasters predict that during the coming decade, real GDP will continue to grow 10 percent annually, but the population growth rate is expected to drop to 6 percent annually. If the forecasters are correct, which of the following will be true?

Question

Quizplus · Accepted Answer

The annual growth rate of per capita real GDP is calculated by subtracting the population growth rate from the real GDP growth rate. Initially, it was 10% - 8% = 2%. With the new population growth rate, it will be 10% - 6% = 4%.

Over the Past Decade, a Nation's Real Gross Domestic Product