Brazil’s real
GDP was 1,520 trillion reais in 2011 and 1,585 trillion reais in 2012. Brazil’s
population was 195 million in 2011 and 196.5 million in 2012. Calculate
a. The growth rate of real GDP.
b. The growth rate of real GDP per person.
c. The approximate number of years it takes
for real GDP per person in Brazil to double if the 2012 growth rate of real GDP
and the population growth rate are maintained.
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ANSWER
ReplyDeletea. The growth rate of real GDP.
The economic growth rate is the growth rate of real GDP. Between 2011 and 2012 this growth rate equals [(1,585 trillion reais - 1,520 trillion reais)/1,520 trillion reais] x 100, which is 4.3 percent.
b. The growth rate of real GDP per person.
Brazil’s population grew at [(196.5 million - 195 million)/195 million] x 100, which is 0.8 percent. Brazil’s economic growth rate is 4.3 percent, so the growth rate of real GDP per person is 4.3 percent - 0.8 percent, or 3.5 percent.
c. The approximate number of years it takes for real GDP per person in Brazil to double if the 2012 growth rate of real GDP and the population growth rate are maintained.
Brazil’s real GDP per person is growing at 3.5 percent a year. The rule of 70 tells us that Brazil’s real GDP per person will double in 70/3.5 = 20 years.