Change in Gross Domestic Product Quick Check

Question

2 of 52 of 5 Items
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

25%
25 percent

125%
125 percent

1.5%

Answer 1

To calculate the growth rate of GDP from year 1 to year 2, you can use the following formula:

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

Plugging in the 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%.