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What happens to per capita GDP if GDP grows more slowly than population?

Answer and explanation

Correct answer: It will fall

Per capita GDP equals total GDP divided by population. If population increases faster than GDP, the denominator grows more rapidly than the numerator, so GDP per person declines. For example, a 4% rise in GDP with a 6% rise in population produces a fall in per capita GDP of approximately 2% before considering compounding. Thus option B is correct.

Related tags

Population GrowthPer Capita GdpWelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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