Question

In 2010, the imaginary nation of Mainland had a population of 6,000 and real GDP of 120,000. In 2011 the population was 6,200 and real GDP of 128,960. Over the year in question, real GDP per person in Mainland grew by ________.a. 2 percent, which is about the same as average U.S. growth over the last one-hundred years. b. 4 percent, which is high compared to average U.S. growth over the last one-hundred years c. 2 percent, which is high compared to average U.S. growth over the last one-hundred years. d. 4 percent, which is about the same as average U.S. growth over the last one-hundred years

Answer 1

Answer:

b. 4 percent, which is high compared to average U.S. growth over the last one-hundred years

Explanation:

First, we are going to find the GDP per person of the imaginary nation in 2010 and 2011; to do it , we just need to divide the GDP in each year by population each year.

- For 2010: $\frac{GDP}{Population} =\frac{120,000}{6,000} =20$

- For 2011: $\frac{GDP}{Population} =\frac{128,960}{6,200} =20.8$

Second, we are doing to find the percentage increase using the formula:

%Increase = $\frac{|current-old|}{old} *100=\frac{|20.8-20|}{20} *100=\frac{0.8}{20} *100=0.04*100$ = 4%

Since the US has been growing at roughly 2% per year for the past 100 years, we can conclude that b. is the correct answer.