Question

A nation's per capita real GDP was$\$2,000$ in $2017$, and the nation's population was$5$ million in that year. Between $2017$ and $2018$, the inflation rate in this country was role="math" localid="1651519423079" $5$ percent, and the nation's annual rate of economic growth was $10$ percent. Its population remained unchanged. What was per capita real GDP in $2018$? What was the level of real GDP in$2018$?

Short answer

The GDP level in$2018$is$\$11\mathrm{billion}$.

Step-by-step solution

Table for GDP information

Table is,

Per capital real GDP grew at $10\%$, which comes out to be $\$2200$.

role="math" localid="1651519614686" $\$2000\times (1+0.1)=\$2200$

Calculation for real GDP

Formula is ,

$\mathrm{Real}\mathrm{GDP}=\mathrm{percapita}\mathrm{real}\mathrm{GDP}\times \mathrm{population}$

$Re\mathrm{alGDP}=\$2200\times 5\mathrm{million}$

$=\$11\mathrm{billion}$