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# Formula for economic growth rate watch

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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