Question

Suppose that nominal GDP was $9250000.00 in 2005 in Orange County California. In 2015, nominal GDP was $11750000.00 in Orange County California. The price level rose 2.50% between 2005 and 2015, and population growth was 4.25%. Calculate the following figures for Orange County California between 2005 and 2015. Give all answers to two decimals. a. Nominal GDP growth was %. Part 2 (1 point)FeedbackS Hit by. Economic growth was %.

Answer 1

Answer:

27.02%; 27.02%

Explanation:

Nominal GDP growth rate refers to the rate at which nominal GDP changes from one year to the next year.

Given that,

Nominal GDP in 2005 = $9,250,000

Nominal GDP in 2015 = $11,750,000

Rise in price level between 2005 and 2015 = 2.50%

Population growth rate = 4.25%

Nominal GDP growth rate:

= [(Nominal GDP in 2015 - Nominal GDP in 2005) ÷ Nominal GDP in 2005] × 100

= [($11,750,000 - $9,250,000) ÷ $9,250,000] × 100

= ($2,500,000 ÷ $9,250,000) × 100

= 0.2702 × 100

= 27.02%

Economic growth rate refers to the rate at which an economy is producing goods and services at a particular point of time.

Economic growth:

= [(Nominal GDP in 2015 ÷ Nominal GDP in 2005) - 1] × 100

= [($11,750,000 ÷ $9,250,000) - 1] × 100

= (1.2702 - 1) × 100

= 27.02%