Reference equation: Real GDP per capita growth rate = Nominal GDP per capita growth rate rate. - Inflation rate – Population growth This equation is an approximation of the exact rate of growth of GDP per capita, and so it results in some errors when calculating this rate. However, the simplified equation is both easy to use and results in small error terms when inflation, nominal GDP growth, and population growth are low, and so it is a useful approximation. The table below lists a fictional country's nominal GDP, real GDP, GDP deflator, and population over two years. Year 2019 2020 Nominal GDP $1,100,000 $1,200,000 GDP deflator 100 102 Real GDP (2019 dollars) $1,100,000 $1,176,471 Population 1,000 1,005 a. Verify that the real GDP values in the above table are accurate. Instructions: Round your answers to one decimal place. b. This country's real GDP per capita for 2019 is $ This country's real GDP per capita for 2020 is $ c. The growth rate in this country's real GDP per capita between 2019 and 2020 is d. The growth rate in nominal GDP between 2019 and 2020 is %. The growth rate in the GDP deflator between 2019 and 2020 is The growth rate in the population between 2019 and 2020 is %. %. %.
Reference equation: Real GDP per capita growth rate = Nominal GDP per capita growth rate rate. - Inflation rate – Population growth This equation is an approximation of the exact rate of growth of GDP per capita, and so it results in some errors when calculating this rate. However, the simplified equation is both easy to use and results in small error terms when inflation, nominal GDP growth, and population growth are low, and so it is a useful approximation. The table below lists a fictional country's nominal GDP, real GDP, GDP deflator, and population over two years. Year 2019 2020 Nominal GDP $1,100,000 $1,200,000 GDP deflator 100 102 Real GDP (2019 dollars) $1,100,000 $1,176,471 Population 1,000 1,005 a. Verify that the real GDP values in the above table are accurate. Instructions: Round your answers to one decimal place. b. This country's real GDP per capita for 2019 is $ This country's real GDP per capita for 2020 is $ c. The growth rate in this country's real GDP per capita between 2019 and 2020 is d. The growth rate in nominal GDP between 2019 and 2020 is %. The growth rate in the GDP deflator between 2019 and 2020 is The growth rate in the population between 2019 and 2020 is %. %. %.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Reference equation: Real GDP per capita growth rate = Nominal GDP per capita growth rate
rate.
-
Inflation rate – Population growth
This equation is an approximation of the exact rate of growth of GDP per capita, and so it results in some errors when calculating this
rate. However, the simplified equation is both easy to use and results in small error terms when inflation, nominal GDP growth, and
population growth are low, and so it is a useful approximation. The table below lists a fictional country's nominal GDP, real GDP, GDP
deflator, and population over two years.
Year
2019
2020
Nominal GDP
$1,100,000
$1,200,000
GDP deflator
100
102
Real GDP
(2019 dollars)
$1,100,000
$1,176,471
Population
1,000
1,005
a. Verify that the real GDP values in the above table are accurate.
Instructions: Round your answers to one decimal place.
b. This country's real GDP per capita for 2019 is $
This country's real GDP per capita for 2020 is $
c. The growth rate in this country's real GDP per capita between 2019 and 2020 is
d. The growth rate in nominal GDP between 2019 and 2020 is
%.
The growth rate in the GDP deflator between 2019 and 2020 is
The growth rate in the population between 2019 and 2020 is
%.
%.
%.
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