Question:

Per capita GDP of a country is defined as the ratio of the GDP, in million dollars, to the population, in millions, of the country. If the GDP of a country increased by 20% from 2015 to 2016 and at the same time, the population increased by 5%, what was the percent increase in 'Per capita GDP' of the country from 2015 to 2016?

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When calculating the percent increase in a ratio, adjust both the numerator and the denominator and then compute the new ratio.
Updated On: Sep 30, 2025
  • 4.0%
  • 14.0%
  • 14.3%
  • 15.0%
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The Correct Option is C

Solution and Explanation

Step 1: Calculate the new GDP.
The GDP increased by 20%, so the new GDP is: \[ 1.20 \times \text{GDP}. \]
Step 2: Calculate the new population.
The population increased by 5%, so the new population is: \[ 1.05 \times \text{Population}. \]
Step 3: Calculate the new per capita GDP.
The per capita GDP in 2016 is: \[ \frac{1.20 \times \text{GDP}}{1.05 \times \text{Population}} = \frac{1.20}{1.05} \times \frac{\text{GDP}}{\text{Population}} = 1.1429 \times \text{Per capita GDP in 2015}. \]
Step 4: Calculate the percent increase.
The percent increase in per capita GDP is: \[ 1.1429 - 1 = 0.143 = 14.3%. \]
Final Answer: \[ \boxed{14.3%} \]
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