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

Answer and explanation

Correct answer: It will fall

Per capita GDP is calculated as total GDP divided by population: per capita GDP = GDP ÷ population. If GDP stays constant while the denominator, population, increases, the quotient must decrease. For example, a fixed output of 100 divided among 10 people gives 10 per person, but among 20 people it gives 5. Hence option B is correct.

Related tags

Per Capita GdpPopulation GrowthAverageGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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