1.

Calculate per capita GDP, annual growth rates in real GDP, annual
growth rates in per capita real GDP, and the number of years it
takes to double real GDP when given data.
a. Use the example data on pp. 136 137 to answer the following two
questions.
i. Derive a formula for calculating the growth rate of real GDP.
(GDP(Later Year)-GDP(Base Year)/GDP(Base Year))*100
ii. Derive a formula for calculating the growth rate of real GDP per
capita.
(GDP per Capita(Later Year)-GDP per Capita(Base Year)/GDP per
Capita(Base Year))*100
b. Suppose an economys real GDP is $30,000 in year 1 and $31,200 in year
2.
i. What is the growth rate of its real GDP?
4%
ii. Assume the population is 100 in year 1 and 102 in year 2. What is
the growth rate of real GDP per capita?(300 year 1)(306 year 2)
2%
c. Suppose the real GDP and the population of an economy in 7 different
years were those shown in the following table.
Year
1

Population (millions)
30

Real GDP ($ billion)

$9

Per capita real GDP

$300

60

24

$400

90

45

$500

120

66

$550

150

90

$600

180

99

$550

210

105

$500

i. Calculate per capita real GDP for years 2 7. Put your figures in the
table.
ii. What would have been the size of the optimum population of the
economy?
Year 5 150 million people
iii. What was the amount of the growth in real GDP between year 1
and year 2?
$15 billion
iv. What was the rate of growth in real GDP between year 3 and year
4?
32%

d. Given the hypothetical data in the following table, calculate the annual
rates of growth in real GDP and real per capita GDP over the period given.
Year

Real
GDP
($
billions)

Annual
growth
rate (%)

# Years will
take to
double Real
GDP at this
rate
(Use Rule of
70)

$2416

2472

2%

35 Years

2563

6%

2632

5
6

Real
GDP per
capita

Annual
growth
rate (%)

# Years will
take to double
Real GDP per
capita at this
rate
(Use Rule of
70)

11,950

1%

70 Years

12 Years

12,213

4%

18 Years

9%

8 Years

12,421

5%

14 Years

2724

13%

5 Years

12,719

8%

9 Years

2850

18%

4 Years

18,948

61%

1 Years

$11,785