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What happens to per capita GDP if the same GDP is shared among fewer people?

Answer and explanation

Correct answer: It will rise

Per capita GDP equals total GDP divided by population. If total GDP remains constant while the population becomes smaller, the denominator falls, so the quotient rises; for example, 1,000 units divided among 100 people gives 10 per person, while the same 1,000 among 50 gives 20. Option A is correct. This is an arithmetic average and does not by itself prove that every person becomes richer.

Related tags

Per Capita GdpPopulationRatioAverageGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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