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# Formula for economic growth rate

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1. How do you calculate economic growth rate?
2. Hi you ca use nominal or real GDP for the values.
Hope this helps!
(GDP in year 2 / GDP in year 1) - 1
3. (Original post by Aidan.reed)
Hi you ca use nominal or real GDP for the values.
Hope this helps!
(GDP in year 2 / GDP in year 1) - 1
Thanks but why is it minus 1? ?
4. (Original post by BrownieLover)
Thanks but why is it minus 1? ?
Because for example

(16000/15000) = 1.06666667

Some including my self see thats at 106.666..% so you can see thats a 6.66...% increase

(16000/15000) - 1 = 0.06666667 this way just gives you the increase you could then multiply that by 100 to give you something you're probably more familiar with

(16000/15000) - 1 = 0.06666667
0.06666667 x 100 = 6.666...7%

I hope this helps.

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