Question

The GDP for a hypothetical economy is determined to be 6 billion dollars in year 1 and 7.5 billion dollars in year 2. What is the growth rate of GDP from year 1 to year 2?(1 point)
Responses

150%
150 percent

1.5%
1.5%

125%
125 percent

25%

Answer 1

To calculate the GDP growth rate from year 1 to year 2, use the formula:

\[
\text{Growth Rate} = \frac{\text{GDP in Year 2} - \text{GDP in Year 1}}{\text{GDP in Year 1}} \times 100
\]

Substituting the given values:

\[
\text{Growth Rate} = \frac{7.5 \text{ billion} - 6 \text{ billion}}{6 \text{ billion}} \times 100
\]
\[
= \frac{1.5 \text{ billion}}{6 \text{ billion}} \times 100
\]
\[
= 0.25 \times 100
\]
\[
= 25\%
\]

Therefore, the growth rate of GDP from year 1 to year 2 is **25%**.