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)

Question

Responses

25%
25 percent

1.5%
1.5%

125%
125 percent

150%

Answer 1

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

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

Substituting in the given values:

\[ \text{Growth Rate} = \left( \frac{7.5 , \text{billion} - 6 , \text{billion}}{6 , \text{billion}} \right) \times 100 \]

Calculating the difference:

\[ \text{Growth Rate} = \left( \frac{1.5 , \text{billion}}{6 , \text{billion}} \right) \times 100 \]

Now perform the division:

\[ \text{Growth Rate} = \left( 0.25 \right) \times 100 \]

Finally, we obtain:

\[ \text{Growth Rate} = 25% \]

Thus, the correct answer is:

25%