Using the average yearly growth rates provided in the table below, calculate the

Question

Using the average yearly growth rates provided in the table below, calculate the index of real GDP and population growth between 2000 and 2010 for China, Canada, and Zimbabwe. Assume that the value of this index is equal to 100 for the year 2000. Calculate the growth rates for these three countries using the compounding growth function.

Note: To calculate the growth in GDP, use the compounding growth function: p0 x (1+ r)t where p0 is the original value of 100, r is the growth rate (for example, a growth rate of 2.1% (Canadian GDP) has a decimal equivalent of r = 0.021), and t is the number of years of growth (10 years in this case). An original value of 100 is used as the index to incorporate the weight of any changes.

Instructions: Enter your answers rounded to two decimal places.

China: GDP increased from 100 to ______, and population increased from 100 to _______.

Canada: GDP increased from 100 to ______, and population increased from 100 to ________.

Zimbabwe: GDP decreased from 100 to ______, and population increased from 100 to _______.

Average Growth Rate (2000-2009) of GDP Population Per capita
GDP High-income countries United States 2.0 1.1   0.9 Canada 2.1 1.0   1.1 Japan 1.1 0.2   0.9 France 1.5 0.5   1.0 Low-income countries China 10.9 0.8 10.1 India 7.9 1.6   6.3 Ethiopia 7.5 2.8   4.7 Burundi 2.7 2.0   0.7 Haiti 0.7 1.8 -1.1 West Bank/Gaza -0.9 3.8 -4.7 Zimbabwe -7.5 0.9 -8.4

Explanation / Answer

For Canada

Real GDP Growth=100*(1+(2.1/100))^(10)=123.10

Real Population Growth=100*(1+(1/100))^(10)=110.46

For China

Real GDP Growth=100*(1+(10.9/100))^(10)=281.39

Real Population Growth=100*(1+(0.8/100))^(10)=108.29

For Zimbabwe

Real GDP Growth=100*(1+(-7.5/100))^(10)=45.86

Real Population Growth=100*(1+(0.9/100))^(10)=109.37

Average Growth Rate (2000-2009) of GDP Population Per capita GDP Real GDP growth Real Population Growth High-income countries United States 2 1.1   0.9 121.90 111.56 Canada 2.1 1   1.1 123.10 110.46 Japan 1.1 0.2   0.9 111.56 102.02 France 1.5 0.5   1.0 116.05 105.11 Low-income countries China 10.9 0.8 10.1 281.39 108.29 India 7.9 1.6   6.3 213.90 117.20 Ethiopia 7.5 2.8   4.7 206.10 131.80 Burundi 2.7 2   0.7 130.53 121.90 Haiti 0.7 1.8 -1.1 107.22 119.53 West Bank/Gaza -0.9 3.8 -4.7 91.36 145.20 Zimbabwe -7.5 0.9 -8.4 45.86 109.37

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