In 2012, the imaginary nation of Platland had a population of 10,000 and real GDP of 42,000,000 . During the year its real GDP per person grew by about 1.94%. Which of the following sets of growth rates is consistent with this growth in real GDP per person?
a. 3% population growth and 4% real GDP growth
b. 3% population growth and 5% real GDP growth
c. 6% population growth and 4% real GDP growth
d. 6% population growth and 5% real GDP growth
b
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The supply-and-demand model may not be appropriate in markets with large transaction costs
What will be an ideal response?
Assume the central bank decides to lower the bank's reserve requirements. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real credit market with supply of real credit shifting to the right. b. Start the analysis in the real goods market with aggregate demand shifting to the left. c. Start the analysis in the real credit market with demand for real credit shifting to the left. d. Start the analysis in the real credit market with demand for real credit shifting to the right. e. Start the analysis in the real credit market with supply of real credit shifting to the left.