Calculating economic growth. The formula for calculating % change in real GDP is the following. % change in real GDP = final value of real GDP – initial value of real GDP (x100) ÷ initial value of GDP. … For example. If an economy had real GDP of… $75.3billion in 2010
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% change in real GDP =
final value of real GDP – initial value of real GDP (x100)
initial value of GDP
81.7 – 75.3 (x100)
73.3 = 8.73%
a.) How much did the economy 2007 -2008 grow?
1611 – 1579 (x100)
1579 = 2.03% Growth
b.) How much did the economy 2008 -2009 grow?
1611 = -0.87% Growth
Question 5 – How is it possible that country can have positive real GDP growth and yes have negative real GDP per capita?
% change in real GDP per capita =
% change in real GDP – % change in population
Suppose that an economy’s real GDP grew by 2.2% in 2007, and it’s population grew by 1.5% during the same year. By how much did its real GDP per capita grow?
2.2% - 1.5% = 0.7%