The annual rate of growth of real GDP in a developing nation is 0.2 percent. Ini

Question

The annual rate of growth of real GDP in a developing nation is 0.2 percent. Initially, the country's population was stable from year to year. Recently, however, a significant increase in the nation's birthrate has raised the annual rate of population growth to 0.4 percent. Calculate the rate of growth of per capita real GDP before the increase in population growth. nothing percent. (Enter your response as a percentage rounded to one decimal place.) If the rate of growth of real GDP remains unchanged, calculate the new rate of growth of per capita real GDP following the increase in the birthrate. nothing percent.(Enter your response as a percentage rounded to one decimal place.)

Explanation / Answer

a) annual rate of real GDP growth = 0.2% As the population remains unchanged from year to year then rate of per capita real GDP growth = rate of annual GDP growth rate- rate of population growth = 0.2% - 0 = 0.2% = 0.2 (omitting percent).

b) rate of annual GDP growth is 0.2% also population growth rate is 0.4% therefore real per capita GDP growth rate will be = 0.2% - 0.4% = -0.2% which means real per capita GDP is falling by 0.2%.

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