In 2011, the imaginary nation of Maconia had a population of 8,200 and real GDP of 210,500.
Maconia had 5% growth in real GDP per person. In 2012 it had a population of 8,400. To the nearest
dollar what was real GDP in Maconia in 2012?
a. 216,815
b. 221,025
c. 226,416
d. None of the above is correct.

C. 226,416

Explanation:

Firstly, we find the GDP per person for 2011.

Next, we calculate the 5% GDP per person increase in 2012

Finally, we calculate for GDP in 2012 using available data gotten

So,

Given that

In 2011,

Real GDP = 210,500

Population = 8200

GDP per person for 2011 = 210,500 ÷ 8200

= 25.67 approximately.

In 2012, there was a 5% growth in GDP per person, therefore,

GDP person 5% increase in 2012 = (5÷100) × 25.6707317073

= 0.05 × 25.6707317073

= 1.2835365854

2012 GDP per person = 25.6707317073 + 1.2835

= 26.9542682927

Or

5% increase of 25.6707317073 = 25.6707317073 × 1.05 = 26.9542682927

So, to get the GDP in 2012,

GDP = GDP per person × population

Where GDP per person = 26.9542682927

Population = 8400

Thus,

Real GDP = 26.9542682927 × 8400

= 226,415.8

Approximately = 226,416 to the nearest dollar.

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