Use the following table to answer the questions. Year Real GDP (billions of 2009 doll

step 1 First, the growth rate of real GDP for each year from 1991 to 1994 will be from 1991 to 1992 is

Use the following table to answer the questions. Year ...

Use the following table to answer the questions. $$ \begin{array}{c|c} \hline \text { Year } & \text { Real GDP (billions of } 2009 \text { dollars) } \\ \hline 1990 & \$ 8,955 \\ \hline 1991 & 8,948 \\ \hline 1992 & 9,267 \\ \hline 1993 & 9,521 \\ \hline 1994 & 9,906 \\ \hline \end{array} $$ a. Calculate the growth rate of real GDP for each year from 1991 to 1994 b. Calculate the average annual growth rate of real GDP for the period from 1991 to 1994

Use the following table to answer the questions.
$$
\begin{array}{c|c}
\hline \text { Year } & \text { Real GDP (billions of } 2009 \text { dollars) } \\
\hline 1990 & \$ 8,955 \\
\hline 1991 & 8,948 \\
\hline 1992 & 9,267 \\
\hline 1993 & 9,521 \\
\hline 1994 & 9,906 \\
\hline
\end{array}
$$
a. Calculate the growth rate of real GDP for each year from 1991 to 1994
b. Calculate the average annual growth rate of real GDP for the period from 1991 to 1994

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Key Concepts

Growth Rate Calculation

The growth rate is a key measure in economics that quantifies the percentage change in a variable, such as real GDP, from one period to the next. To calculate this, one typically subtracts the initial value from the final value, divides by the initial value, and multiplies by 100 to express it as a percentage. This metric is widely used to assess the performance and dynamism of an economy on a year-to-year basis.

Average Annual Growth Rate

The average annual growth rate provides a smooth measure of economic expansion over a multi-year period by averaging the growth rates of consecutive years. This is either computed as the arithmetic mean of the annual growth rates or by using a compound annual growth rate formula, which captures the constant rate at which an economy would have grown if it expanded steadily over the period.

Real GDP

Real GDP, or Real Gross Domestic Product, measures the value of all final goods and services produced within an economy over a given period, adjusted for changes in the price level (inflation or deflation). This adjustment allows for a more accurate comparison of economic output over time by holding prices constant, typically using a base year.

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