Question

In: Economics

Suppose that nominal GDP was $9750000.00 in 2005 in Montgomery County Maryland. In 2015, nominal GDP...

Suppose that nominal GDP was $9750000.00 in 2005 in Montgomery County Maryland. In 2015, nominal GDP was $11500000.00 in Montgomery County Maryland. The price level rose 3.00% between 2005 and 2015, and population growth was 4.00%. Calculate the following figures for Montgomery County Maryland between 2005 and 2015.

a. nominal growth is:

b.economic growth is:

c.inflation is:

d.real GDP growth is:

e.per capita GDP growth is:

f. real per capita GDP growth is:

Expert Solution

As per the question the various information about the Montgomery country Maryland is given below

Nominal GDP in 2005 = $9750000.00

Nominal GDP in 2015 = $11500000.00

The rise in price level = 3.00%

Population growth rate = 4.00%

A. Nominal Growth rate is = (Nominal GDP in 2015 - Nominal GDP in 2005)/ Nominal GDP in 2005 = (11500000.00 - 9750000.00)/ 9750000.00 = 17.9487 = Approx 17.95%

B. Economic Growth is = Nominal Growth rate - The rise in price level - Population growth rate = 17.95% - 3.00% - 4.00% = 10.95%

C. Inflation: refers to percentage increase in price level. It is clearly evident from the question that between 2005 to 2015 the price level increases by 3.00%. So the inflation is = 3.00%

D. Real DGP Growth is = Nominal Growth rate - The rise in price level = 17.95% - 3.00% = 14.95%

E. Per Capita GDP growth is = Nominal Growth rate - Population growth rate = 17.95% - 4.00% = 13.95%

F. Real Per Capita GDP Growth is = Real DGP Growth - Population growth rate = 14.95% - 4.00% = 10.95%

Rahul Sunny answered 1 year ago

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