YEAR Real GDP Inflation 2000 PRICES rate (CPI) ($ billion) (%per year) 1980 5161

Question

YEAR Real GDP Inflation 2000 PRICES rate (CPI) ($ billion) (%per year) 1980 5161.7 13.5 1981 5291.7 10.3 1982 5189.3 6.2 1983 5423.8 3.2 1984 5813.6 4.3 1998 9066.9 1.6 1999 9470.3 2.2 Using the data front Calculating growth Rates Calculate: a. The inflation rate in 1980 to 1981 and 1998 to 1999 b. The growth rate of real GAP IN 1981 to 1982 and 1983 to 1984 For (c) and (d) Use the average annual growth rate equation here. c. The average inflation rate from 1980 to 1981 and 1998 to 1999 d. The average growth rate of real GDP from 1981 to 1982 and 1983 to 1984 YEAR Real GDP Inflation 2000 PRICES rate (CPI) ($ billion) (%per year) 1980 5161.7 13.5 1981 5291.7 10.3 1982 5189.3 6.2 1983 5423.8 3.2 1984 5813.6 4.3 1998 9066.9 1.6 1999 9470.3 2.2 Using the data front Calculating growth Rates Calculate: a. The inflation rate in 1980 to 1981 and 1998 to 1999 b. The growth rate of real GAP IN 1981 to 1982 and 1983 to 1984 For (c) and (d) Use the average annual growth rate equation here. c. The average inflation rate from 1980 to 1981 and 1998 to 1999 d. The average growth rate of real GDP from 1981 to 1982 and 1983 to 1984

Explanation / Answer

a.

Growth rate in inflation rate from 1980 to 1981 = (10.3 – 13.5)/13.5 = -23.7%

Growth rate in inflation rate from 1998 to 1999 = (2.2 – 1.6)/1.6 = 37.5%

b.

Growth rate in real GDP from 1981 to 1982 = (5189.3 – 5291.7)/5291.7 = -1.94%

Growth rate in real GDP from 1983 to 1984 = (5813.6-5423.8)/ 5423.8 = 7.19%

c.

Average growth rate = (Growth rate in period 1 + growth rate in period 2)/no. of period

Here, data for 1980 and 1998 is insufficient to apply above formula.

Thus for present sent of data, result will be same as part (a).

d.

Average growth rate = (Growth rate in period 1 + growth rate in period 2)/no. of period

Growth rate IN real GDP in 1981 = 2.518%

Growth rate in real GDP in 1982 = -1.935%

Thus, average growth rate in GDP from 1981 to 1982 = (2.518%+-1.935%)/2 = .2915%

Growth rate in real GDP in 1983 =4.518%

Growth rate in real GDP in 1984 = 7.186%

Thus, average growth rate in GDP from 1983 to 1984 = (4.518% + 7.186%)/2 = 5.85%

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