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AQA AS Economics Exam Unit 2

Discussion in 'Business studies' started by muchomacho, Aug 30, 2011.

  1. Looking at the multi choice questions, and this may be a silly question but I'm a bit puzzled by Q15, (which scored low marks nationally but no mention of it in the examiners report)

    15 An economy had nominal GDP growth of 8% last year, inflation of 5.5% and population growth of 2.5%. The approximate percentage change in real GDP per capita was

    A ?2.5
    B 0
    C +2.5
    D +5.0

    The correct answer is B, but is GDP per Capita always adjusted for inflation, I don't think it is? I would have had the answer at 5.5%! Nominal growth less population change.

    Where am I going wrong, or is it a mistake?
  2. Real GDP takes account of inflation, therefore it is equal to 8% - 5.5%.
    Allowing for the population growth of 2.5%, Real GDP per capita grew by 2.5%- 2.5% = 0

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