Part 1 Between 2015 and 2016, the country of West Fredonia experienced a growth rate of -2.6%....

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Economics

Part 1
Between 2015 and 2016, the country of West Fredonia experienceda growth rate of -2.6%. If nominal GDP had increased by 1.3% andthe population growth was recorded as 0.4%, then calculate theannual inflation rate in West Fredonia. Give your answer to onedecimal.___ Â Â Â %
Part 2
Year Nominal GDP
(billions of current $) Inflation rate Population
(millions)
2014 3754 2% 117
2015 3898 3% 120
2016 3919 1% 124

Using the information in the table above, calculate economic growthfor 2015. Give your answer to two decimal places.
Â Â Â %

Year	Nominal GDP (billions of current $)	Inflation rate	Population (millions)
2014	3754	2%	117
2015	3898	3%	120
2016	3919	1%	124

Answer & Explanation Solved by verified expert

3.8 Ratings (373 Votes)

Solution:-

Part:-1

Calculate Annual inflation rate:-

Growth rate = Growth rate of nominal GDP - annual inflation rate - population growth rate

-2.6% = 1.3% - annual inflation rate â€“ 0.4%

-2.6% = 0.9% - annual inflation rate

Annual inflation rate = 2.6% + 0.9% = 3.5%

Part:-2

Nominal GDP Growth rate = (3898 - 3754) / 3754

Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â = 144 / 3754

Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â = 3.84%

Population Increase Rate = (120 - 117) / 117

Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â = 3 / 117

Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â = 2.56

Economic Growth Rate = 3.84 - 2.56 - 3

Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â = -1.72

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Part 1 Between 2015 and 2016, the country of West Fredonia experienced a growth rate of -2.6%....

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Economics

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