In 1950 GDP in the United Kingdom (measured in year 2005 pounds) was ₤317 billion. In 2000, it was ₤1,108 billion. Calculate the growth rate of real GDP in the United Kingdom over this period. Now suppose that the United Kingdom grows at the same rate for the 50 years following 2000. What will the UK real GDP be in the year 2050?

To calculate the growth rate of real GDP between 1950 and 2000, we can use the following formula for growth rate:

\[
\text{Growth Rate (r)} = \left( \frac{\text{GDP in 2000}}{\text{GDP in 1950}} \right)^{\frac{1}{t}} - 1
\]

Where:
- GDP in 2000 = ₤1,108 billion
- GDP in 1950 = ₤317 billion
- \( t = 2000 - 1950 = 50 \) years

### Step 1: Calculate the Growth Rate

\[
r = \left( \frac{1,108}{317} \right)^{\frac{1}{50}} - 1
\]

Let's compute that.The growth rate of real GDP in the United Kingdom from 1950 to 2000 was approximately **2.53% per year**.

### Step 2: Predicting GDP in 2050

Now, to predict the GDP in 2050, assuming the same growth rate continues, we can use the future value formula:

\[
\text{GDP in 2050} = \text{GDP in 2000} \times (1 + r)^{50}
\]

Where:
- \( r = 0.0253 \) (the growth rate)
- \( t = 50 \) years (from 2000 to 2050)

Let's calculate the GDP in 2050.If the United Kingdom's economy grows at the same rate of 2.53% per year, the real GDP in 2050 would be approximately **₤3,873 billion** (measured in 2005 pounds).

Would you like more details or have any further questions?

Here are 5 related questions to expand on this topic:
1. How would the calculation change if the growth rate fluctuated over time?
2. How does real GDP differ from nominal GDP in this context?
3. What factors could influence whether the UK maintains the same growth rate for the next 50 years?
4. How does compound growth over multiple decades affect economic forecasts?
5. What is the significance of using 2005 pounds as a base year for real GDP measurement?

**Tip**: Always use real GDP (adjusted for inflation) rather than nominal GDP when comparing economic growth over long periods.

Discover how to calculate the growth rate of real GDP in the UK from 1950 to 2000, with a growth rate of 2.53% per year. Learn how to predict the UK's real GDP for 2050 based on the same growth rate using key formulas for exponential growth. Suitable for high school economics or advanced math students.

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