In 2012, the imaginary nation of Platland had a population of 10,000 and real GDP of 42,000,000. During the year its real GDP per person grew by about 1.94%. Which of the following sets of growth rates is consistent with this growth in real GDP per person?
A)3% population growth and 4% real GDP growth
B)3% population growth and 5% real GDP growth
C)6% population growth and 4% real GDP growth
D)6% population growth and 5% real GDP growth

Question

Quizplus · Accepted Answer

The growth in real GDP per person is approximately the real GDP growth rate minus the population growth rate. With a 5% real GDP growth and 3% population growth, the growth in real GDP per person is about 2%, which is consistent with the given 1.94%.

In 2012, the Imaginary Nation of Platland Had a Population