Question

In: Economics

Alphaland has a 4 percent annual growth rate of real GDP and a 2 percent annual...

Alphaland has a 4 percent annual growth rate of real GDP and a 2 percent annual rate of population growth.

The growth rate of real GDP per capita for Alphaland is %_____

Betaville has a 6 percent annual growth rate of real GDP and a 5 percent annual rate of population growth.

The growth rate of real GDP per capita for Betaland is %____

Expert Solution

1.1.96%

Let the population be 100 , and the GDP be $100

Currently GDP per capita is $100/100=1

After one year

Population : 102 , GDP is $104

GDP per capita = 104/102 = $1.0196

That is a 1.96% growth in per capita GDP

2.0.95%

Let the population be 100 , and the GDP be $100

Currently GDP per capita is $100/100=1

After one year

Population : 105 , GDP is $106

GDP per capita = 106/105 = $1.0095

That is a 0.95% growth in per capita GDP

Rahul Sunny answered 2 years ago

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