If, between 2008 and 2018, the economy's real GDP grew from $20 billion to $40 billion, what was the average annual growth rate in the economy? O 3% O 7% 20% 100%

Economics Nov 07, 2020

Expert Solution

Number of years = 2018 - 2008 = 10

So,

Average GDP growth rate = (40 billion / 20 billion)^{(1 / 10)} - 1 = (2)^{(1 / 10)} - 1 = 1.0718 - 1 = 0.0718 = 7.18%

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