Suppose a country's real GDP per capita was $9,000 in 1990,and it grew to $18,000 by 2000.What is the annual growth rate of the country's real GDP per capita during this period?

Question

Quizplus · Accepted Answer

The annual growth rate can be calculated using the formula for compound annual growth rate (CAGR), which is: $$CAGR = \left(\frac{Final\ Value}{Initial\ Value}\right)^{\frac{1}{Number\ of\ Years}} - 1$$. Plugging in the values: $$CAGR = \left(\frac{18000}{9000}\right)^{\frac{1}{10}} - 1 \approx 0.07$$ or 7%.

Suppose a Country's Real GDP Per Capita Was $9,000 in 1990,and