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A country's GDP rose by 10% and its population rose by 4%. What is the approximate change in per capita output?

Answer and explanation

Correct answer: About 6% rise

Per capita output equals total output divided by population. For relatively small percentage changes, its approximate growth is found by subtracting population growth from GDP growth: 10% − 4% = 6%. Therefore, option C is the appropriate approximate answer. Adding the rates would incorrectly ignore the denominator, and a 4% fall has the wrong direction. The exact change is slightly below 6%, but the question asks for an approximation.

Related tags

Growth RatePer Capita OutputGdpNumericalGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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