If Studyland's real GDP was $345 billion in the year 2013 and $366 billion in 2014, what was Studyland's annual economic growth?

Question

BlackTom AI · Accepted Answer

Re-stating the question: If Studyland's real GDP was $345 billion in 2013 and $366 billion in 2014, what was Studyland's annual economic growth?

Answer options: 
a. 0.94% 
b. 5.7% 
c. 3.2% 
d. 6.1%

Now, evaluate each option step by step.

Option a: 0.94%
To test this, compute the growth rate as (GDP2014 - GDP2013) / GDP2013 = (366 - 345) / 345 = 21 / 345. Numerically, 21 divided by 345 is about 0.0609, or roughly 6.1%. A result near 0.94% would require a much smaller numerator or a much larger denominator, which does not match our data. Therefore, 0.94% is not correct.

Option b: 5.7%
This would imply (GDP2014 - GDP2013) / GDP2013 ≈ 0.057. Multiplying 0.057 by 345 gives approximately 19.6, which would suggest GDP rising by about $19.6 billion, not the actual $21 billion increase observed (from 345 to 366). The actual increase is larger, so 5.7% is not accurate given the numbers.

Option c: 3.2%
A growth rate of about 3.2% would correspond to an increase of roughly 0.032 × 345 ≈ 11.0 billion. Since the actual increase is $21 billion, this option significantly underestimates the growth, making it incorrect.

Option d: 6.1%
Compute precisely: (366 - 345) / 345 = 21 / 345 ≈ 0.060869..., which equals about 6.09%, commonly rounded to 6.1%. This matches the observed increase from 345 to 366 and aligns with standard annual growth rate calculation for real GDP using a base-year value.

Putting it together, the option that aligns with the exact calculation and the data is the one that yields approximately 6.1%. Therefore, option d best matches the computed growth rate given the 2013 and 2014 GDP figures.

If Studyland's real GDP was $345 billion in the year 2013 and $366 billion in 2014, what was Studyland's annual economic growth?

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