In a Given Year, Suppose the Nominal GDP Growth Rate

question 13

Multiple Choice

In a given year, suppose the nominal GDP growth rate is 5 percent, the inflation rate is 1.2 percent, and the population growth rate is 3.8 percent. What is the real GDP per capita growth rate?

• A) 3.8 percent
• B) 5.0 percent
• C) 1.2 percent
• D) 0.0 percent

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Definitions:

Zero-Coupon Bond

A bond that does not pay periodic interest payments and is sold at a discount from its face value. The bond's profit comes from the difference between its purchase price and its face value at maturity.

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures, including interest payments and the difference between the bond’s purchase price and its face value.

Maturity Value

The amount payable to the holder of a financial instrument at its maturity date, including the principal and any accrued interest.

Present Yield

The current return on an investment, often calculated as the annual dividend or interest divided by the current market price of the asset.