If real GDP rises from $700 billion to $704 billion,the economic growth rate is
A)($704 billion/$700 billion)/100.
B)($704 billion - $700 billion)/$700 billion.
C)$700 billion/$704 billion.
D)($704 billion - $700 billion)/$704 billion.

Question

Quizplus · Accepted Answer

The economic growth rate is calculated as the change in real GDP divided by the initial real GDP. Therefore, the formula is: ($704 billion - $700 billion)/$700 billion = $4 billion/$700 billion = 0.0057 or 0.57%. Option B gives the correct formula for this calculation.

If Real GDP Rises from $700 Billion to $704 Billion,the