Economic Growth in the UK

EconEye Admin

11 months ago

UK’s economic growth rate is expected to remain modest at 1.3% in 2025. On a per head basis the economic output is only set to grow 0.4% this year.—bbc.com

Answer the following questions to check your understanding of the story.

Based on the data in this news clip, what is expected to change in the UK’s population in 2025?

UK’s population is expected to _____________.

a) grow by more than 1.3%

b) shrink by approximately 0.9%

c) remain unchanged

d) grow by approximately 0.9%

Wrong! - What is the relationship between the real GDP growth, real GDP per person growth, and population growth?

That's Right! - The growth rate of real GDP per person is approximately equal to the real GDP growth rate minus the population growth rate. So the UK’s population is expected to grow by approximately 0.9% (1.3% - 0.4%) in 2025.

At the growth rate of real GDP per person in 2025, after how many years is the standard of living in the UK expected to double?

a) 54 years

b) 175 years

c) 70 years

d) 7 years

Wrong! - What is the standard of living, and what is the Rule of 70?

Well Done! - The standard of living depends on real GDP per person. According to the Rule of 70, UK real GDP per person is expected to double in 175 years (70 divided by 0.4).

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