Suppose that the following table describes the economy of En

Suppose that the following table describes the economy of Endor.

a. Calculate the growth rate of GDP and population for 2014, 2015, and 2016 in percentage terms.

b. Calculate GDP per capita for each year.

c. Did economic growth occur between 2015 and 2016?

d. If Endor’s economy grows at a constant rate of 7% per year from 2017 onwards, how long will it take for the 2016 real GDP to double?

Real GDIP (million)(millions of Y ear Populatiorn 2013 2014 2015 2016 5,220 5,230 5,515 5,516 Ewoks 30.5 31 31.2 32.4

Real GDP growth rate 2014 = (Real GDP in 2014 / Real GDP in 2013) -1= (5230/5220) -1 = 0.19%

Real GDP growth rate 2015 = (Real GDP in 2015 / Real GDP in 2014) -1= (5515/5230) -1 = 5.45%

Real GDP growth rate 2016 = (Real GDP in 2016 / Real GDP in 2015) -1= (5516/5515) -1 = 0.02%

Population growth rate:

Population growth rate 2014 = (Population in 2014 / Population in 2013) -1= (31/30.5) -1 = 1.64%

Population growth rate 2015 = (Population in 2015 / Population in 2014) -1= (31.2/31) -1 = 0.645%

Population growth rate 2016 = (Population in 2016 / Population in 2015) -1= (32.4/31.2) -1 = 3.85%

Real GDP per capita 2013 = 5220/30.5= 171.15

Real GDP per capita 2014 = 5230/31=168.71

Real GDP per capita 2015 = 5515/31.2=176.76

Real GDP per capita 2016 = 5516/32.4=170.25

yes as shown in a part, GDP grew by 0.02% in 2016.

use rule of 70

how long will it take for the 2016 real GDP to double = 70/7 = 10 years APPROXIMATELY

otherwise use formula

FV= PV*(1+G)^T

as GDP is expected to double, then FV = 2PV

2PV=PV*(1.07)^T

2= (1.07)^T

T= 10.25 YEARS