Answer:
Calculate the following figures for Midland County Texas between 2005 and 2015. a. Nominal GDP growth, b. Economic growth, c. Inflation, d. Real GDP growth, e. Per capita GDP growth, f. Real per capita GDP growth.
Nominal GDP(current year) = $11,750,000
Nominal GDP(base year) = $9,000,000
Inflation = 3%
Population growth = 3.50%
a. Nominal GDP growth: = [(Nominal GDP(current year) - Nominal GDP(base year)) / Nominal GDP(base year) ]* 100
= (11,500,000.00 - 9,000,000) / 9000000 * 100
= [2,500,000 / 900,000,000} * 100
= 0.2778
= 27.78%
b. Economic growth = [(GDP(current year) / GDP(base year)) – 1] * 100
= [11,500,000.00 / 9,000,000 - 1] * 100
= 1.27777 - 1 * 100
= 0.27777 * 100
= 27.78%
c. Inflation is when there is increase in the general price level of the goods and service. The price level rise by 3%, hence. the inflation become 3%.
d. Real GDP growth = Nominal GDP growth - Inflation
= 27.78% - 3%
= 24.78%
e. Per capita GDP growth = Nominal GDP growth - Population growth
= 27.78% - 3.50%
= 24.28 %
f. Real per capita GDP growth: = Real GDP growth - Population growth
= 24.78% - 3.50%
= 21.28%
