Which answer below is correctA.Compound growth rate: A=b*(1+g)^nB.Number of years to economic double=2/annual growth rateC.GDP per capital= GDP/ capital D.Growth of GDP per capita =Growth of GDP-population
Question
Which answer below is correctA.Compound growth rate: A=b*(1+g)^nB.Number of years to economic double=2/annual growth rateC.GDP per capital= GDP/ capital D.Growth of GDP per capita =Growth of GDP-population
Solution
All of the options provided are correct with the exception of option D. Here's why:
A. Compound growth rate: A=b*(1+g)^n This is the formula for compound growth, where A is the final amount, b is the initial amount, g is the growth rate, and n is the number of periods.
B. Number of years to economic double=2/annual growth rate This is known as the rule of 70, which is used to estimate the number of years it would take for an investment to double given a specified annual growth rate. The formula is usually 70/annual growth rate, but 2/annual growth rate can be used if the growth rate is expressed as a decimal.
C. GDP per capita= GDP/ capital GDP per capita is a measure of the economic output of a country per person. It is calculated by dividing the GDP (Gross Domestic Product) by the total population.
D. Growth of GDP per capita =Growth of GDP-population This is incorrect. The growth of GDP per capita is calculated by subtracting the growth rate of the population from the growth rate of the GDP, not the population itself. So, it should be: Growth of GDP per capita = Growth of GDP - Growth rate of population.
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