The table below shows real GDP per capita for the United States between the years 1950–2016.Real GDP per Capita over TimeYear Real GDP per Capita (dollars)1950 $12,8531975 22,3322000 41,6162016 45,189 Instructions: Round your answers to one decimal place. a. What is the growth rate in the standard of living from 1950 to 1975? % b. What is the growth rate in the standard of living from 1975 to 2000? % c. What is the growth rate in the standard of living from 2000 to 2016? %
Question
The table below shows real GDP per capita for the United States between the years 1950–2016.Real GDP per Capita over TimeYear Real GDP per Capita (dollars)1950 $12,8531975 22,3322000 41,6162016 45,189 Instructions: Round your answers to one decimal place. a. What is the growth rate in the standard of living from 1950 to 1975? % b. What is the growth rate in the standard of living from 1975 to 2000? % c. What is the growth rate in the standard of living from 2000 to 2016? %
Solution
a. The growth rate in the standard of living from 1950 to 1975 can be calculated using the formula for growth rate:
Growth Rate = [(Final Value - Initial Value) / Initial Value] * 100
For 1950 to 1975, the initial value is 22,332.
So, Growth Rate = [(12,853) / $12,853] * 100
Growth Rate = [12,853] * 100
Growth Rate = 0.737 * 100
Growth Rate = 73.7%
b. The growth rate in the standard of living from 1975 to 2000 can be calculated in a similar way. The initial value is 41,616.
So, Growth Rate = [(22,332) / $22,332] * 100
Growth Rate = [22,332] * 100
Growth Rate = 0.863 * 100
Growth Rate = 86.3%
c. The growth rate in the standard of living from 2000 to 2016 can be calculated with the initial value as 45,189.
So, Growth Rate = [(41,616) / $41,616] * 100
Growth Rate = [41,616] * 100
Growth Rate = 0.086 * 100
Growth Rate = 8.6%
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