Neco Model Questions Vol1 2020 Economics Question 18

Practice objective / multiple choice question 18 from the 2020 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2020 Economics Objective / Multiple Choice Hard Difficulty
Question 18 NECO_MODEL_QUESTIONS_VOL1 • 2020 • ECONOMICS • objective

Country X had a per‑capita GNI of \(\$4{,}500\) in 2020. Real GDP grew at \(5\%\) per year while the population grew at \(2\%\) per year.\n\n(a) Compute the annual growth rate of GNI per capita.\n(b) Estimate the GNI per capita in 2025 (five years later).\n(c) The UN classifies a country as "developed" when GNI per capita reaches \(\$12{,}000\). Assuming the population growth rate stays at \(2\%\), what constant annual real‑GDP growth rate must the country sustain from 2020 to 2025 to achieve the developed‑country threshold?

Answer Options

A. Per‑capita growth ≈ 2.50 %; GNI per capita 2025 ≈ $4,800; required real‑GDP growth ≈ 26 % per year.
Correct Answer B. Per‑capita growth ≈ 2.94 %; GNI per capita 2025 ≈ $5,200; required real‑GDP growth ≈ 24 % per year.
C. Per‑capita growth ≈ 3.12 %; GNI per capita 2025 ≈ $5,500; required real‑GDP growth ≈ 22 % per year.
D. Per‑capita growth ≈ 3.00 %; GNI per capita 2025 ≈ $5,100; required real‑GDP growth ≈ 23 % per year.
Correct Answer
B
Correct Option:
Per‑capita growth ≈ 2.94 %; GNI per capita 2025 ≈ $5,200; required real‑GDP growth ≈ 24 % per year.

About This Question

This is Neco Model Questions Vol1 2020 Economics Question 18. It is one of the objective questions from the 2020 Neco Model Questions Vol1 Economics examination.

Difficulty level: Hard .

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