Answer:
a. Country Z's GDP will double in 23 years' time, given the experts prediction of 5% growth for 3 and 3% thereafter.
b. Z's GDP 's growth rate would be 39%.
This growth rate is calculated by determining Z's GDP from the end of 2025 as 292,000. So, (292,000 - 210,000)/210,000 x 100 = 39% from the 2019 base year.
Step-by-step explanation:
a) 2019 Country Z's GDP = 210,000
2019 Growth rate = 5%
Future growth rate:
2019 - 2022 = 5%
2022- 2025 = 3%
2025 - so on = 1%
Let Country Z's GDP in 2019 = G₀ = 210,000
n = number of years from 2019
g = growth rate = 5%
(1 + g)ⁿ = increase in GDP as a result of the growth rate and number of years
Gⁿ = GDP in n years
Therefore, Gⁿ = G₀(1 + g)ⁿ
b) With GDP growth of 5% from 2019 to 2022, the GDP will be
= 210,000 (1 + 5%)³
= 210,000 x 1.158
= 243,000 approx.
c) From 2022 to 2025 at 3%, the GDP will be
= 243,000 (1 + 3%)∧20
= 243,000 x 1.817
= 441,531
d) Z's GDP from 2025 with 1% growth and so on, will become double at:
Gⁿ = 265,600(1 + 1%)∧48
= 265,600 x 1.61
= 428,000
48 + 6 = 54 years.
