Question

Suppose the Gross Domestic Product (GDP) of Nation X was 2,000 crores in 2018-19, whereas the Gross Domestic Product of Nation Y in the same year was 120,000 crores. If the Gross Domestic Product of Nation X rises to 4,000 crores in 2019-20 and the Gross Domestic Product of Nation Y rises to 200,000 crores in 2019-20. Compare the rate of change of GDP of Nations X and Y, taking 2018-19 as base year.​

Answer 1

Explanation:

Suppose the Gross Domestic Product (GDP) of Nation X was 2,000 crores in 2018-19, whereas the Gross Domestic Product of Nation Y in the same year was 120,000 crores. If the Gross Domestic Product of Nation X rises to 4,000 crores in 2019-20 and the Gross Domestic Product of Nation Y rises to 200,000 crores in 2019-20. Compare the rate of change of GDP of Nations X and Y, taking 2018-19 as base year

Answer 2

The Growth rate of GDP

Explanation:

Gross domestic product (GDP) is the total market value of the goods and services produced by a country’s economy during a specific period of time.

The formula for calculating GDP is:-

GDP = Consumption + Investment + Government Spending + Net Exports

or

GDP = C + I + G + NX

Now,

Comparing the Growth rate of Gdp taking 2018-19 as base year

So,

The formula is = $\frac{GDP (2019-2020) - GDP (2018-2019)}{GDP (2018-2019)}$ x 100

In simple words $\frac{GDP of current year - GDP of previous year}{GDP of previous year}$ x 100

For Nation X

$\frac{4,000-2,000}{2,000}$ x 100

So the rate of change of GDP for Nation X  is 100%

For Nation Y

$\frac{2,00,000-1,20,000}{1,20,000}$ x 100

So the rate of change of GDP for Nation Y is 66.67%

Therefore

GDP Growth rate of Nation X is 100%

GDP Growth rate of Nation Y is 66.67%