Chapter 31, Problem 1.2P

Subpart (a):

To determine

Growth rate in real GDP from 2011 to 2012.

Explanation of Solution

The growth rate in real GDP can be calculated using the following formula:

$\text{Growth rate in real GDP}=\left[\frac{\left({\text{Real GDP}}_{\text{New}}-{\text{Real GDP}}_{\text{Old}}\right)}{{\text{Real GDP}}_{\text{Old}}}\right]\times 100$ (1)

Using the formula (1), the growth rate in real GDP from 2011 to 2012 of United States, El Salvador, Republic of South Africa, Cambodia, and Russia can be calculated as follows:

$\begin{array}{c}\text{Growth rate in real GDP in U}\text{.S }=\left(\frac{15,556.86-15,204}{15,204}\right)\times 100\\ =2.32\%\end{array}$

Real GDP growth rate in U.S. is 2.321%.

Table-1 shows the real GDP growth rate in different countries, which is obtained using Equation (1).

Table-1

Country	Growth rate
U.S.	2.32%
El Salvador	1.87%
Republic of South Africa	2.47%
Cambodia	7.35%
Russia	3.44%

Among these five countries, Cambodia experienced the highest rate of economic growth.

Economics Concept Introduction

Concept introduction:

Growth in real GDP: Growth in real GDP measures the changes of real GDP from one year to another year.

Sub part (b):

To determine

Growth rate in real GDP from 2012 to 2013.

Explanation of Solution

Table-1 shows the real GDP growth rate from 2012 to 2013 in different countries, which is obtained using Equation (1).

Table -1

Country	Growth rate
U.S.	2.22%
El Salvador	1.7%
Republic of South Africa	1.89%
Cambodia	7.47%
Russia	0.25%

Among these five countries, Cambodia experienced the highest rate of economic growth from 2012 to2013.

Economics Concept Introduction

Concept introduction:

GDP growth rate: Growth rate of GDP measures the changes of GDP in one year to another year in an economy.

Subpart (c):

To determine

Growth rate in real GDP from 2013 to 2014.

Explanation of Solution

Table-1 shows the real GDP growth rate from 2013 to 2014  in different countries, which is obtained using Equation (1).

Table -1

Country	Growth rate
U.S.	2.29%
El Salvador	1.92%
Republic of South Africa	2.62%
Cambodia	7.38%
Russia	1.67%

Among these five countries, Cambodia experienced the highest rate of economic growth from 2013 to2014.

Economics Concept Introduction

Concept introduction:

GDP growth rate: Growth rate of GDP measures the changes of GDP from one year to another year in an economy.

Sub part d):

To determine

Annual growth rate in real GDP from 2011 to 2014.

Explanation of Solution

The average annual growth rate in real GDP from 2011 to 2014 for U.S. can be calculated as the sum total growth rates divided by 3 as follows:

$\begin{array}{c}\text{Annual growth rate of real GDP in U}\text{.S }=\left(\frac{2.32\%+2.22\%+2.32\%}{3}\right)\\ =2.29\%\end{array}$

Annual growth rate of real GDP I U.S. is 2.29%.

The average annual growth rate in real GDP from 2011 to 2014 for El Salvador can be calculated as the sum of the total growth rates divided by 3 as follows:

$\begin{array}{c}\text{Annual growth rate of real GDP in El Salvador }=\left(\frac{1.87+1.70+2.20}{3}\right)\\ =1.92\%\end{array}$

Annual growth rate of real GDP in EL Salvador is 1.92%.

The average annual growth rate in real GDP from 2011 to 2014 for Republic of South Africa can be calculated as the sum of the total growth rates divided by 3 as follows:

$\begin{array}{c}\text{Annual growth rate of real GDP in Republic of South Africa }=\left(\frac{2.47\%+1.89\%+3.50}{3}\right)\\ \text{=}2.62\%\end{array}$

Annual growth rate of real GDP in Republic of South Africa is 2.62%.

The average annual growth rate in real GDP from 2011 to 2014 for Cambodia can be calculated as the sum of the total growth rates divided by 3 as follows:

$\begin{array}{c}\text{Growth rate in real GDP in Cambodia }=\left(\frac{7.35\%+7.47\%+7.31\%}{3}\right)\\ =7.38\%\end{array}$

Annual growth rate of real GDP in Cambodia is 7.38%.

The average annual growth rate in real GDP from 2011 to 2014 for Russia can be calculated as the sum total growth rates divided by 3 as follows:

$\begin{array}{c}\text{Growth rate in real GDP in Russia }=\left(\frac{3.44\%+1.32\%+0.25\%}{3}\right)\\ \text{=}1.67\%\end{array}$

Annual growth rate of real GDP in Russia is 1.67%.

Among these five countries, Cambodia experienced the highest average annual rate of economic growth from 2013 to2014.

Economics Concept Introduction

Concept introduction:

Annual GDP growth rate: Annual growth rate of GDP measures by dividing the total growth rate with the number of years.