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What happens to per capita GDP if total GDP remains constant and population falls?

Answer and explanation

Correct answer: It may rise

Per-capita GDP is calculated as total GDP divided by population: per-capita GDP = total GDP ÷ population. If total GDP remains constant while the population decreases, the denominator becomes smaller, so the average GDP per person increases. For example, a fixed output shared among fewer people gives a larger amount per person. Therefore, option C is correct; the other choices contradict this ratio calculation.

Related tags

Per-Capita GdpPopulationRatio CalculationGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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