Question

Year Alta (Real GDP) Zorn (Real GDP) Alta (Population) Zorn (Population)
1 $2,000 $150,000 200 500
2 2100 $152,000 202 505
3 2200 $154,000 210 508

Between years 2 and 3 :

a. population fell in Alta.
b. Alta's real GDP grew more rapidly than Zorn's real GDP.
c. real GDP fell in Zorn.
d. population growth reduced Alta's real GDP growth to zero.

Answer 1

Answer: b. Alta's real GDP grew more rapidly than Zorn's real GDP.

Explanation:

Rte of growth for Alta's real GDP;

= (Year 3 GDP - Year 2 GDP) / Year 2 GDP

= (2,200 - 2,100) / 2,200

= 0.045

= 4.5%

Rate of growth for Zorn's real HDP;

= (154,000 - 152,000) / 152,000

= 0.013

= 1.3%

Zorn's real GDP grew slower than Alta's GDP