Respuesta :
Answer:
Growth Rate of GDP = 9.03%
Explanation:
First, the question is quite jumbled together, let's make it more organized
Consider the following data on U.S. GDP:
Nominal GDP GDP Deflator
Year (in billions of dollars) (base year 2015)
________________________________________________________
2014 17,348 108.7
1994 7,309 73.8
The growth rate of nominal GDP between 1994 and 2014 was ____
Solution
The Formula for Growth Rate of Nominal GDP to be employed in the question is as follows:
GDP Growth Rate = [(GDP 2014/ GDP 1994) ∧ 1/N] -1 x 100
N in the formula represents the number of years between the two periods
1994-2014 = 10
Based on the formula we, input the figures in the question as follows:
Growth Rate of GDP = ($17,348 Billion / $7,309 Billion) ∧ 1/10] -1 x 100
= 2.3731 ∧ 0.1] -1 x 100
=1.0903 -1 x 100
= 0.903 x 100
= 9.03%
Answer:
9.03%
Explanation:
To calculate the growth rate of nominal GDP (NGDP) between 1994 and 2014, we employ the formula for calculating cumulative growth rate of nominal GDP over a period longer than two periods stated as follows:
NGDPG = [(NGDPx ÷ NGDPx-1)^(1/n)] – 1 ………………………………… (1)
Where;
NGDPG = Nominal GDP growth rate = ?
NGDPx = GDP of the current or latest year in the period, i.e. 2014 GDP = $17,348
NGDPx-1 = GDP of the oldest year in the period, i.e. 1944 GDP = $7,309
n = number of years = 10
Substituting the values into equation (1) above, we have:
NGDPG = [(17,348 ÷ 7,309)^(1/10)] – 1
= [(2.37351210835956)^0.10)] – 1
= 1.09028276065863 – 1
NGDPG = 0.09028276065863 = 0.903 or 9.03% approximately
The growth rate of nominal GDP between 1994 and 2014 was 9.03% .
