Chapter 37, Problem 1FRQ

a.

To determine

Lower real GDP of the country in 2017 can be predicted as per the graph given.

Explanation of Solution

Country Z will have lower real GDP in 2017 as per the data given as it has a negative average annual growth rate of real GDP i.e. -0.1% in 2016.

Economics Concept Introduction

Real GDP: Real Gross Domestic Product refers to the measure that determines the value of goods and services which are produced in the country within a specific time frame after adjusting for inflation.

b.

To determine

The largest increase in real GDP in 2017 if the growth rate continues.

Explanation of Solution

The largest real GDP of any country cannot be predicted as the largest value of real GDP in the future cannot be determined based on given Information. Thus, the information provided is insufficient for determining the country with the largest real GDP.

Economics Concept Introduction

Real GDP: Real Gross Domestic Product refers to the measure that determines the value of goods and services which are produced in the country within a specific time frame after adjusting for inflation.

c.

To determine

The country whose real GDP will at least double in the next 10 years if the growth rate continues.

Explanation of Solution

The country name whose real GDP will double in the next 10 years if its growth rate will continue for the next 10 years in country C. This is because a country must have an average annual growth rate of 7% to get its real GDP to double in the next 10 years and country C has the highest growth rate i.e. 8.6%.

Economics Concept Introduction

Real GDP: Real Gross Domestic Product refers to the measure that determines the value of goods and services which are produced in the country within a specific time frame after adjusting for inflation.