IAI Actuarial Core Principles · Business Economics · Impact of the macroeconomic environment on business
India's real GDP was ₹200 lakh crore in Year 1 and ₹212 lakh crore in Year 2. The population grew from 140 crore to 142.8 crore over the same period. Approximately what was the growth rate of real GDP per head?
Real GDP per head grew by about 4%. GDP grew 6% while population grew 2%, so the per-head growth is roughly 1.06 divided by 1.02 minus one, which is 3.9%. Quoting 6% ignores the rise in population.
- A6.0%
- B4.0%Correct
- C2.0%
- D8.0%
- 3.0%
Explanation
GDP growth is 12/200 = 6%. Population growth is 2.8/140 = 2%. Per-head growth is 1.06/1.02 - 1 = 3.92%, approximately 4%. The 6% option ignores population growth.
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