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If both GDP and per capita GDP are analysed, what additional benefit is obtained?

Answer and explanation

Correct answer: Understanding total output along with the average output or income level per person

Total GDP indicates the size of an economy’s production, whereas per capita GDP is calculated by dividing GDP by population and indicates the average output or income level per person. Considering both measures gives a broader picture: total GDP shows economic scale, while per capita GDP helps compare average material availability across countries or across time. However, it still does not fully capture inequality or welfare.

Related tags

GdpPer Capita GdpWelfareAverage IncomeGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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