Use the graph shown below to calculate the growth rate of real GDP for a price increase of 20 percentage points in each case. Enteryour responses below rounded to one decimal place.Price index160155150145140135130125120115110105100959085801250 1300 1350 1400 1450 1500 1550 16004 a. If the present price level is 100, the growth rate of real GDP isb. If the present price level is 120, the growth rate of real GDP is%%.

The real economic growth is the overall growth of productivity after the inflation rate is adjusted.…

Answered: a. If the present price level is 100,…

a. If the present price level is 100, the growth rate of real GDP is b. If the present price level is 120, the growth rate of real GDP is %. %.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Production And Growth

Section17.1: Economic Growth Around The World

Problem 1QQ

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Question

Use the graph shown below to calculate the growth rate of real GDP for a price increase of 20 percentage points in each case. Enter
your responses below rounded to one decimal place.
Price index
160
155
150
145
140
135
130
125
120
115
110
105
100
95
90
85
80
1250 1300 1350 1400 1450 1500 1550 1600
4

a. If the present price level is 100, the growth rate of real GDP is
b. If the present price level is 120, the growth rate of real GDP is
%
%.

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Step 1: Define growth rate of real GDP

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Step 2: a. Determine GDP growth rate with price level of 100

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Step 3: b. Calculate real GDP growth rate with price 120

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